The California State Auditor’s office has sued Huntington Beach over the city’s continued refusal to cooperate with an audit looking into its settlement with the Pacific Airshow.
The lawsuit, filed on Oct. 22 in Orange County Superior Court, seeks an order to mandate Huntington Beach allow city officials to be interviewed and turn over documents related to the settlement. It also asks the court to declare that the state auditor has the authority to audit a charter city, which City Attorney Michael Gates has argued it does not.
The lawsuit is the latest controversy related to the 2023 settlement between the city and the operators of the Pacific Airshow. That settlement saw the city agreeing to pay Pacific Air Show $4.9 million over losses incurred after the final day of the event in 2021 was canceled due to an oil spill.
A state committee in May requested the audit to evaluate the decision-making that went into the settlement.
Gates, according to the lawsuit, told the auditor’s office that the city would not comply with the audit unless ordered by a court.
The state auditor has “broad powers” to issue subpoenas to obtain witness testimony and produce documents it requests, according to the lawsuit.
The state auditor had issued a subpoena on Oct. 1 to interview City Treasurer Alisa Backstrom and for permits and contracts between the city and Pacific Airshow. The city did not make Backstrom available.
The auditor’s office said in the lawsuit that it has audited at least 27 charter cities without issue. The air show audit was originally expected to be released by winter.
The city has played host to the Pacific Airshow since 2016. The three-day show was cut short a day in 2021 due to an oil spill off the coast, which closed beaches in the city and around the county for weeks.
The 2023 settlement also set terms should the Pacific Airshow pursue a long-term contract with the city to host the event, which has not happened yet. Those terms include permitting it to host the event for up to 40 years, waiving fees and allowing thousands of parking spaces to be temporarily monetized by the Pacific Airshow.
Gates said in an email included with the lawsuit that the City Council directed city departments to not cooperate with the audit. The settlement has been championed by Huntington Beach’s conservative City Council majority.
The audit is estimated to cost the state $342,600. A case management conference is scheduled for February.
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