California lawmakers question $5.4 million Huntington Beach air show settlement

State auditors will take a close look at Huntington Beach’s decision to pay operators of the Pacific Air Show $5.4 million after an offshore oil spill caused the show to end early in 2021.

On Tuesday, California State Senator Dave Min (D-Irvine), a member of the Joint Committee on Legislative Audit, successfully lobbied for the probe, the Voice of OC reported . Min wants to know if the settlement was an appropriate amount or constitutes a gift to Code Four, the for-profit company that produces the air show.

“Like hundreds of businesses along the Huntington Beach coastline, there is no doubt the Pacific Airshow lost revenue during the beach closures that followed the 2021 oil spill but it is unclear that they were owed any damages from the city for its decision, made in conjunction with the State and the County of Orange, to shut down its beach, and it is also unclear whether their lost revenues were close to the amount provided by the City’s settlement,” Min said in a news release.

The October 2021 spill of 25,000 gallons of crude oil created a large sheen that killed wildlife, shuttered fisheries for more than a month and closed beaches as blobs of tar washed ashore.

Federal regulators determined that Amplify Energy, the pipeline’s owner, ignored dozens of alarms that indicated a leak was occurring and ordered a fine of $3.4 million. Amplify said the spill was caused by two ships that dragged their anchors, striking the pipeline during a January 2021 storm.

In an emailed statement to Voice of OC, Huntington Beach City Attorney Michael Gates said the state is overstepping its bounds in pursuing an audit.

“The State has no clear legal authority to inspect or investigate what the California Supreme Court has repeatedly described as a ‘quintessential municipal affair,’ that is, the spending of local monies and the local decision-making that goes with it, by a Charter City,” Gates said.

He added that the settlement would be paid over 6 years and guarantee the return of the air show, which he said brings in millions of dollars of economic benefit.

Democrat City Councilman Dan Kalmick, who is in the minority, said he welcomes the audit.

“As an elected city council member who was on council during the oil spill and the settlement ‘negotiation’ by the new council majority, I have serious questions about this settlement. ‘Why was this case settled and why for so much money?’ Kalmick said in a news release.

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