(November 23)   Board members of the San Bernardino International Airport Authority have extended A.J. Wilson’s contract to oversee airport development operations at the now shuttered Norton Air Force Base for another year.
In continuing Wilson’s original contract, which was for $315,000 per year when he was hired in November 2011, the board on November 14 upped it to $351,000.
Wilson was brought in last year in the wake of the resignation of Don Rogers, who had served for eight years as the airport’s executive director. Roger’s departure was precipitated by an FBI raid of San Bernardino International Airport Authority (SBIAA) headquarters and offices and hangars at the airport itself in September 2011, along with a scathing grand jury report in July 2011. That report and the raid concerned themselves with the highly questionable activities of Scot Spencer, who had been hired during Rogers’ watch as the contract developer of the airport. Spencer, who had served a four-year federal prison sentence for bankruptcy fraud pertaining to his efforts in the early 1990s to revive Braniff Airways, was hired by the SBIAA board upon Rogers’ recommendation, largely because of the perception that he had extensive contacts throughout the airline industry.
Spencer’s management of what was supposed to be a $38 million renovation of the airport’s passenger terminal and a $7 million development of its concourse was dogged by cost overruns, boosting the combined cost of the passenger terminal and the concourse to $142 million. No commercial airlines have yet flown out of the airport, despite the completion of those improvements. Instead, Spencer exploited his position at the airport, showing favoritism toward companies he owned or controlled and set up at San Bernardino International Airport, including SBD Aircraft Services, Norton Aviation Maintenance Services, Unique Aviation, San Bernardino Airport Management, SBD Properties LLC, KCP Leasing and Services, SBAM Technics, and SBD Aircraft Services, to the detriment of other aviation-related companies located there. Spencer’s action resulted in decisions by Aeros Aeronautical Systems Corp. and BaySys West, both of which were making substantial lease payments for hangar space at the airport, to leave San Bernardino. Spencer also became a franchisee of the corporate jet-servicing company, Million Air, which was based at San Bernardino International Airport. Million Air terminated its relationship with Spencer earlier this year after the company claimed Spencer had failed to pay  hundreds of thousands of dollars he owed it.
Spencer also formed at least two business partnerships with T. Milford Harrison, who had formerly served as the executive director of the San Bernardino International Airport Authority and its sister agency, the Inland Valley Development Authority (IVDA), which is dedicated to the development of the property surrounding the airport.
By the summer of 2011, Spencer owed the county more than $604,000 in unpaid taxes on property and equipment at the airport since 2005 and was in arrears on interest and principal payments on $1.2 million in loans to him through the airport authority.
Rogers, a certified public accountant and the founder of one of the Inland Empire’s most prestigious accounting firms, found himself under fire for his tolerance of Spencer’s depredations. To replace Rogers, board members hired Wilson, who had previously served as the chief administrative officer of St. Louis, the city manager of Portland, Maine, Santa Ana, Pomona and Norco, as well as the executive director of the St. Louis County Municipal League, the Pomona Valley Educational Foundation, the Western Riverside Council of Governments, and the International Association of Arson Investigators.
Wilson was effective in prying the airport and its operations from Spencer’s grip. That accomplishment accounts, in part, for the board’s enthusiasm in extending his contract. Still the same, there are questions about the remaining portion of the basis for the board’s favorable disposition toward Wilson, which consists of the strategy he is advocating in attempting to preserve some $342 million in funding for future operation of the airport.
In 2011, Governor Jerry Brown induced the state legislature to pass ABXI 26, and its companion law, ABX1 27, that called for the elimination of redevelopment agencies and for money normally passed through to them by the state to be utilized for education and law enforcement funding. The San Bernardino International Airport Authority, a joint powers agency involving the county of San Bernardino and the cities of San Bernardino, Highland, Loma Linda and Colton, and the Inland Valley Development Authority, which includes the county and the cities of San Bernardino, Loma Linda and Colton, were in large measure dependent upon redevelopment funding. Wilson, together with attorneys for both agencies, maintains they should be exempt from  ABXI 26 and its companion law.
Wilson is guiding the SBIAA and IVDA in making a case with the state that since they are joint powers authorities dedicated to the reuse of what was formerly federal military property, SBIAA and IVDA are not municipal redevelopment agencies and, accordingly, not subject to ABX1 26 and ABX1 27.
SBIAA and IVDA maintain the property tax money from the area around the former air base should continue to be available to it and be used to defray the $949.5 million in debt and obligations those agencies have accumulated in the airport conversion effort so far. IVDA and SBIAA issued hundreds of millions of dollars in bonds to fund improvements and the bonds were sold to investors under the assumption that the infrastructure to be purchased with the bond proceeds would lead to the creation of an aerodrome with operational revenue, and together with property tax revenue increases enough money would be generated to make timely payments to the bondholders.
SBIAA and IVDA officials contend  that by being allowed to proceed with the airport’s development, they will ensure that those revenue streams remain intact and all obligations will be met.
The California Department of Finance, however, has rejected those assertions, holding that SBIAA and IVDA have no legitimate claim to the projected property tax revenue, known as tax increment.
Wilson is leading SBIAA and IVDA in an effort to appeal that ruling and exhaust any further administrative remedies to retain that future tax revenue, while preparing to sue the state if the money is not ultimately returned to the agencies.
In renewing and increasing his contract, the board is making a strong show of faith in Wilson’s leadership and judgment.  The $351,000 represents the full cost of keeping Wilson in place, since he receives no other financial benefits of any sort. The contract calls for Wilson to be paid $150 an hour to a maximum of 45 hours per week.