The Joint Legislative Audit Committee convened on May 14, 2024, to discuss a significant audit request concerning the City of Huntington Beach's settlement agreement with the Pacific Air Show. Senator Minh initiated the discussion, highlighting concerns over the use of public funds in compensating the air show for lost revenues due to a cancellation linked to an oil spill in 2021. The senator emphasized the lack of transparency regarding how the settlement amount was determined and whether it constituted a misuse of public funds.

The audit, as outlined by State Auditor Parks, will investigate four key areas: the selection process for the air show producer, the total payments made by the city over a four-year period, the rationale behind the settlement agreement, and whether the city's event permit adequately protects its financial interests. The auditor noted that while the audit aims to provide clarity, ongoing litigation may limit the specificity of the findings that can be publicly disclosed.

City officials defended the settlement, asserting that the air show is crucial for the local economy, generating over $100 million annually. They argued that the $5 million settlement, to be paid over six years, was a prudent decision to ensure the continuation of the air show and avoid the risks associated with litigation. The city attorney emphasized that the funds used for the settlement came from the city's general fund, not state resources, and that charter cities have the autonomy to manage their finances.

The committee members expressed a range of opinions on the appropriateness of the audit. Some raised concerns about the implications of state oversight over charter cities, while others insisted on the need for transparency regarding public expenditures. The discussion highlighted the tension between local governance and state authority, particularly in cases involving potential misuse of public funds.

As the meeting concluded, the committee underscored the importance of understanding the decision-making process behind the settlement. The audit aims to shed light on whether the city's actions were justified and to ensure accountability to the residents of Huntington Beach. The outcome of this audit could have lasting implications for how local governments handle similar situations in the future.