Being an "idiot" is not the only or even the most probable reason for making a bad political decision (if this is one). You're committing the common fallacy of oversimplifying by assuming that the principal and the agent are identical, which is never true in government,by definition. Anaheim is not a person who makes its own decisions: there are politicians who make decisions on behalf of the city of Anaheim (and its constituents). Those politicians, as separate entities, have their own incentives. It's entirely rational (and unethical, but not "idiotic") for them to make choices that benefit themselves to the detriment of their constituents. For example, FTA:
> Support for various deals benefiting Disney has come from Anaheim City Council members who have received generous campaign contributions through a byzantine network of political action committees funded by the company
Now I'm not saying that this definitely _is_ bad policy, but your assumption that they must be "idiots" to make the wrong decision for the city isn't a well-founded one. It could easily just be garden variety corruption.