By on August 31, 2011

As municipalities around the country increasingly have second thoughts about continuing red light camera programs, the private companies in charge of the photo ticketing are turning up the heat. Redflex Traffic Systems announced to its Australian shareholders last week that it continues to adjust contract language, boosting the penalties for cities that turn their back on photo ticketing. Just such language has hit in San Bernardino, California where rival photo ticketing firm American Traffic Solutions (ATS) is threatening to impose an extra $1,896,202 fee to punish the city council for attempting to get out of the contract in March. Officials had already approved cutting a check for $175,000 to the company as compensation.

City leaders were shocked to find the penalty for early withdrawal from the contract may have been underestimated by a factor of ten. Police Chief Keith L. Kilmer blamed the mistake on the sloppy work of the city attorney’s office. The city’s legal team blamed Kilmer for providing bad information. In a February 1 memo, Assistant City Attorney Jolena E. Grider calculated the cancellation price as $975 per intersection multiplied by the number of months remaining from the original five-year contract. Grider’s memo, however, confused the term “approach” and “intersection.” Each intersection has four approaches or directions of travel. That means up to four individual cameras can be installed for each intersection.

“I asked police employees several times if installed approach was the same as intersection and was told numerous times that it was,” Grider wrote. “It was not until I received information from ATS a few weeks ago that I learned differently. All the information I received at the time I wrote and based the February memorandum on was from the police department and from no other source.”

Chief Kilmer blasted the city attorney for going to the press and trying to pass the blame for a legal mistake to his department.

“This information about contract terminology was not provided by the police department,” Kilmer wrote in an August 16 memo. “It was within the contract document itself, which I would assume that the city attorney’s office had some hand in preparing and reviewing on multiple occasions.”

The city attorney’s office fired back at Kilmer, insisting negotiations were under way with ATS to arrive at a “mutually beneficial resolution” and that the incorrect information in the February memo could not be used in a court of law.

“There is nothing to be gained by the city of San Bernardino by this type of finger pointing in his memorandum and the inaccuracies cannot be left uncorrected,” Jolena E. Grider wrote on August 17.


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19 Comments on “California: Traffic Camera Firm Shakes Down City...”

  • avatar

    The first thing they teach you in business school is there’s no such thing as a free lunch. The second thing they teach you is that it’s generally not a good idea to sue your customers. Okay, that isn’t the second thing they teach you, but it should be.

  • avatar

    There you go – there is our proof.
    What motivates these companies? Your safety?
    No. These companies are motivated by the idea of your local law enforcement officer fining you hundreds of dollars, and forcing you to pay these fines of which these companies get a cut.

    They are pirates.

    • 0 avatar

      It is worse than that. In many cases the company is the one who collects the “fines” and then cuts a check to the municipality. I believe this is why the recent California case where it came to light that the fines were considered “voluntary”.

  • avatar

    Redflex is the worst thing to come out of Australia since Rupert Murdoch.

  • avatar

    waitaminute. WHY is the attorney asking the police chief to define less than crystal clear contract language. If they didn’t know, they should have clarified or modified the contract language before signing it. “The police chief told me it meant this to him” means nothing in a court of law, and the lawyer should have known that.

    Step one: fire town lawyer

    Step two: towns take note: these camera enforcement sharks are without pity or allegiance. (that’s why you hired them!) they will eat the drivers or the town governments without hesitation or fail. all they want is money and they will turn on you in a heartbeat to get it.

  • avatar
    Joe McKinney

    These traffic camera companies seem intent on cutting their own throats. Suing cities that want out of contracts early. Suing to have anti-camera referendums thrown out. Creating front organizations to spread pro-camera propaganda. Not only are they losing existing customers, this behavior will make it more difficult to attract new customers.

    • 0 avatar

      What you see as a bug might be a feature to a local revenue hungry politician/bureaucrat: if you want to install the systems for more revenue, you downplay the cost to get out of the contract, and even work with Redflex to make the cancellation penalties as onerous as possible. Bonus points if the contract is 10 or 20 years.

      Once the system is installed and taxpayers complain, the local politicians/bureaucrats can say they would love to take the systems out but the cancellation penalty is too high, so we just have to live with it.

      Politicians do it all the time with convention centers, mass transit, stadiums: low ball the initial cost estimates to get the project started, then claim surprise when costs skyrocket…but the project is already under way, can’t stop now.

      There are no shortage of people depending on government for power and income, and red light cameras are part of the revenue stream that they depend on. Nobody likes to see their rice bowl taken away, and they will figure out ways to maintain and expand red light cameras and their ilk.

      • 0 avatar
        Joe McKinney

        I am sure the scenario you describe does happen. This may well be the case in San Bernadino. Either the City Attorney made a big mistake, or he and the other city leaders knew exactly what they were signing.

        There does appear to be a growing backlash aganist the traffic camera companies. More and more cities are trying to get out of their contracts, and anti-camera referendums are becoming more common. I don’t think I have ever heard of a referendum going in favor of the camera companies.

        Evidence of this backlash is also seen in some recent stockholder reports which have been reported on here at TTAC. These reports indicate that in North America the traffic camera companies have had fewer new contracts, fewer contract renewals, and a resulting decline in revenue. Overseas business is still good, but the U.S. market is becoming more difficult.

  • avatar

    What would happen if the town simply adjusted the yellow light time such that the number of infractions was close to none?
    I suspect there is other contract language for that eventuality or perhaps a minimum monthly payment that the town must pay if the number of tickets issued were reduced to almost none.

    Still, might it be cheaper overall for the town to do something like this until the contract ended?

    • 0 avatar


      • 0 avatar
        Mr. K

        Great idea. What would keep the city from installing some sort of sign in front of each camera as well?

        Welcome to Jamaica have a nice day or some such innocuous message at all 4 approaches to the intersection, or more likely (insert name of city) supports safe driving.

        Somehow the power supply could become intermittent to the cameras as well kind of like what happened at BART, or city employees applying some sort of tar coating to a portion of traffic signal poles to evaluate rust reduction could do a sloppy job…

    • 0 avatar
      George B

      Yes! San Bernardino, not ATS, has some control over traffic laws, intersection design, and traffic light timing. If they loosen up where and how long you have to stop for a right turn on red and extend yellow times so it’s harder to get caught by a red when turning left, the money dries up. Bet most of the citizen complaints would also go away.

  • avatar

    I’m not sure that “shake down” here is the appropriate phrase. I dislike RLCs as much as the next guy but these companies are simply protecting themselves from cost associated with early termination. It costs resources to implement these cameras and sometimes that means that deals are only profitable in later years so early termination can mean a loss or no profit. If cities are signing contracts and then changing their minds because of a voter backlash then they will still need to abide by the terms of the contract. The real problem here are the city administrations that lack long term vision and are flip-flopping between short term money making schemes and reacting to vote backlash.

    • 0 avatar

      Kinda sounds like my cell phone contract. I too dislike these cameras, but something I dislike more is unilaterally breaking a legally binding contract. These municipalities seem to think it is a good business practice to try and renegotiate an agreed to early termination fee. It would be one thing if ATS, Redflex or whomever isn’t meeting the terms of the contract. In just about every case I’ve seen, the issue is (righteous in my eyes) voter backlash over the use of these devices. Unfortunately, that shouldn’t be grounds to renegotiate something just because you don’t like it.

    • 0 avatar

      Cities don’t sign contracts. Corrupt, or simply sadistic or stupid, people who are in City government do. Voters can, over the objections of lawyers everywhere screaming about “rule of law” and precedence, simply either elect people who refuse to tax anyone to pay these termination fees, or simply dissolve the entire legal entity that once supposedly “signed” the contract. Then reincorporate later as something else, should they feel like it. Rather than live in a city where one is bound by “promises” made by the kind of back markers that would sign anything like this, one is better off living in unincorporated territory anyway.

      I’m sure it will be a hard slog past decades of legal precedent to get there, but the survival of America as an even remotely civilized place to live, depends on people finally waking up and realizing contacts ought to be binding on those that sign them. Not on the children of those who didn’t.

  • avatar

    Why don’t they they leave the cameras up and running, but pass an ordinance saying that no city funds or manpower may be expended in collecting RLC fines? Let the companies take their pictures and mail out the tickets. Payment would become voluntary.

    • 0 avatar
      Mr. K

      Another great idea – IIRC cops have to review and sign off on each photo. There could be delays in such review and then the reviewed photos could be rejected because the photos, in the opinion of the cops were not sufficiently conclusive…

      The city could then re offer a reasonable termination fee…

    • 0 avatar

      Thats what happened in Los Angeles. The courts refused to honor the machine-generated tickets, so payment became voluntary, and, for reasons I dont fully understand, not show up on your credit report either.

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