By on September 20, 2010

The Grand Terrace, California city council on Tuesday reluctantly voted to pay Redflex Traffic Systems $72,203.75 after the Australian company threatened to impose a $27,500 late fee on the city if it did not pay up immediately. Redflex operates the red light camera program at two intersections, and as of July 1 the company had mailed out 4283 fines worth $446 each. While Grand Terrace officials expected that the system would be a money-maker, the program to date has only enriched the county, the state, the courts and Redflex, which insisted on the additional cash payment.

“After the meeting between you and members of the Redflex Traffic Systems Team on August 8, 2010, to discuss demand of payment, we acknowledge those figures you have produced as revenues received from the San Bernardino County Court,” Redflex Account Executive Jack Weaver wrote in an August 31 letter to the city’s finance director. “…your city is delinquent in your payments in the amount of $73,570.32. Further, you are reminded that Exhibit D [of the contract] calls for payment to be made within 30 days, and the revenues due are subject to a late fee if payment is not received within 60 days.”

When Grand Terrace entered into the contract with Redflex, the last thing officials expected to do was to make payments. The city has a “cost neutrality” arrangement designed to ensure the city could only make a profit or break even from ticketing operations.

“If the city does not collect enough cumulative fine revenue from red light camera tickets, then the city is not responsible for the difference between the Redflex invoiced amount and the fine revenue received,” Finance Director Bernie Simon wrote in a memo to the council. “However, the city would pay Redflex the red light ticket fine revenue received. The Redflex contract states that the city does not owe more than what is collected.”

Grand Terrace is only entitled to one-third of the ticket revenue with the state, San Bernardino County and the courts splitting the remaining two-thirds. Grand Terrace “owes” Redflex $12,513 per month out of its third, but the city’s average share of the fines is only $7156 (the most ever collected in a month was $11,485 in December 2008). That means Redflex pockets 100 percent of the city’s share of ticket revenue generated.

The delinquency problem arose because the city had “computational difficulties” in determining the amount of ticket revenue generated. Last year, the city made payments of $116,072.39 and $52,000 to Redflex from the same error. Officials had hoped to find ways to increase revenue from ticketing.

“Staff will then discuss with Redflex on how to make up the deficit from future vehicle fine revenues received from the court system,” Simon wrote in an August 25, 2009 memo.

State law prohibits payments to red light camera contractors according to the number of fines generated or revenue collected. In 2008, the appellate division of the Orange County Superior Court ruled that cost neutral arrangements specifically violated this statute (view ruling). The contract between Grand Terrace and Redflex runs until April 2012.


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7 Comments on “California: Red Light Camera Company Gives City a Ticket...”

  • avatar

    My first thought was how fun it is to see local pols screwing themselves of their revenue generating schemes with their own legalese……then I remember that they will just find another, more underhanded method to get my money.

  • avatar

    If you live in a city that has Redflex / ATS photo ticketing – then you had better check the campaign contributors of your local politicos.
    The payola list here starts with key state senators and members of the house of reps.  Then there’s those influential city council folks raking it in, one of which was a paid lobbyist before getting on the local council.

  • avatar

    As if they weren’t slimy enough to begin with… Now the idea is ‘let’s send out a bunch of tickets, and if people don’t pay, we’ll just bill the government for them, and collecting their money back is their problem.
    And how many of those tickets are illegitimate?  Who knows, but hey, it’s not our problem!

  • avatar

    I need a shower after reading this.  I guess I’d be happy if it was criminals screwing other criminals.  Problem is that stinky, brown material rolls downhill, and it’s the taxpayers at the bottom of the hill.

  • avatar

    If the cost-neutral contract has been declared in court to be illegal, can the city use that to void the contract?    As delicious as it is to see the city spending resources to administer a deal that makes them nothing, I hate to see Redflex get any revenue at all.

  • avatar

    “Staff will then discuss with Redflex on how to make up the deficit from future vehicle fine revenues received from the court system,” Simon wrote in an August 25, 2009 memo.

    How odd.

    Going in, Redflex instructed the City to slash the green light times to feed a greater number of hapless drivers into slashed yellow times to maximize revenue. The widely-used ITE yellow light formula is badly flawed, resulting in terribly unsafe yellow times but it can the jiggered even more to calculate even shorter, more unsafe yellows.

    There should never, ever, ever, ever, ever be a yellow less than 4 seconds anywhere in the United States but so far only the State of Georgia has stepped up to the plate and made it law.

  • avatar
    George B

    Who controls the traffic light timing and intersection marking?  The city could get revenge by changing the timing and right turn on red rules to make it very difficult to ever get a red light camera ticket.  Redflex might want to pull out of the contract early if the number of tickets dropped to almost nothing.

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