Senator Min's request for an audit of the City of Huntington Beach's settlement agreement with Pacific Air Show LLC has sparked significant discussion among California lawmakers. The audit aims to scrutinize the use of public funds in compensating the air show for lost revenues due to the cancellation of a day of the 2021 event, which was forced by an oil spill off the coast.

During the Joint Legislative Audit Committee meeting on May 14, 2024, Senator Min highlighted concerns regarding the lack of transparency surrounding the settlement agreement. He noted that despite numerous requests for documentation from the city, no information has been provided to clarify how the settlement payments were calculated or whether they constituted a misuse of public funds. The settlement, which totals $5 million to be paid over six years, has raised questions about its justification, especially since the air show did not have a formal contract with the city.

State Auditor Parks outlined the audit's four main objectives: understanding how the city selected Pacific Air Show as the event producer, evaluating the total payments made to the vendor over a four-year period, assessing the rationale behind the settlement agreement, and determining whether the city's event permit adequately protects its financial interests. However, Parks acknowledged that ongoing litigation related to the settlement may limit the specificity of the audit's findings.

City officials defended the settlement, asserting that the air show is crucial for the local economy, generating over $100 million annually. They argued that settling the lawsuit was a prudent business decision to ensure the continuation of the air show and its associated economic benefits. The city attorney emphasized that the settlement was made using local funds, not state resources, and that charter cities have the autonomy to manage their finances without state interference.

The committee's discussions also touched on the broader implications of the audit, with some members questioning the state's authority to intervene in local matters. They expressed concerns about the potential for overreach into the operations of charter cities, while others insisted on the need for transparency and accountability in the use of public funds.

As the audit progresses, it aims to provide clarity on the decision-making process behind the settlement and whether it aligns with legal and ethical standards. The outcome could have significant implications for how local governments handle similar situations in the future, reinforcing the importance of transparency in public financial dealings.