Report: Consumer Protection

Caution: Red Light Cameras Ahead

The Risk of Privatizing Traffic Law Enforcement and How to Protect the Public
Released by: Georgia PIRG Education Fund

In the aftermath of the worst economic crisis since the Great Depression, local governments across America face gaping deficits. Total tax receipts remain below their 2008 levels. Closing the gap would require state and local governments to cut spending by an average of more than 12 percent a year, or raise revenue by an equivalent amount.1   

Facing the prospect of laying off essen- tial public employees, including teachers, firefighters, and police officers, it is no wonder that government officials listen re- ceptively to anyone who can promise a new revenue source, a way to reduce expenses, or an option to reallocate scarce govern- ment resources. Better yet if these ideas can serve a public good in a new and better way, at no cost to the government.

A group of companies have come up with a way to set up set up camera systems to identify vehicles or drivers who run red lights at intersections or break speed limits along roadways. These vendors market their systems as increasing road safety and freeing up police officers to do more im- portant work—all while having a neutral, or even positive, impact on government finances.

Introduction

With such selling points, it is easy to see why local officials have been receptive to proposals to outsource aspects of traffic enforcement to private firms. As many as 700 government authorities have signed contracts for camera systems to date.

These systems have not arrived with- out controversy, however. While the vast majority of citizens support the enforce- ment of traffic laws to make roadways safe, citizens grow concerned if they perceive that a privatized traffic law enforcement system is unjust, or that its main purpose is to generate revenue.

In this report, U.S. PIRG Education Fund evaluates deals that cities have struck with private companies for traffic law en- forcement systems. These deals sometimes prevent local governments from acting in the best interests of their citizens, espe- cially when the terms of the deal prioritize delivering profits for the shareholders or owners of the private firm.

This report does not evaluate the proper role of camera systems in improving public safety. Ultimately, it is up to local government officials to determine how best to guarantee the safety of walkers, bikers and motorists in their community and to

Introduction assess whether automated traffic enforcement is a useful tool in meeting that goal. Rather, this report aims to examine whether privatization of traffic enforce- ment is good for the public. The involvement of for-profit private entities in traffic enforcement is relatively new and brings with it significant new challenges for protecting the public interest.

Any community considering outsourcing traffic law enforcement to a private company must carefully weigh the decision and ensure that it protects the interests of citizens in safe roadways and good government.

Privatization of Traffic Law Enforcement Defined

In this report, U.S. PIRG Education Fund defines the term “privatization of traffic law enforcement” as the outsourcing of functions and decision-making in the enforcement of traffic safety laws away from public officers and toward for-profit companies. We use the term to highlight how the incentives and conditions in contracts with vendors of automated traffic systems can skew the implementation of these programs away from the public interest.

The privatization of traffic law enforcement typically shifts some but not all of the function away from public officials. Police agencies normally retain an off-site and after-the-fact role in the process of approval and appeal of camera citations. Police departments can even deploy automated traffic enforcement systems without priva- tization. However, operating enforcement camera systems in-house is the exception rather than the norm.

Privatized Traffic Law Enforcement: A Nationwide Trend

Privatized traffic law enforcement systems are spreading rapidly across the United States. As many as 700 American municipalities have entered into deals with for-profit companies to install cameras at intersections and along road- ways to encourage drivers to obey traffic signals and follow speed limits.

Contracting with private companies for automated traffic enforcement is part of a larger trend of local governments outsourcing the management of toll roads, parking meters, water and sewer services, garbage collection, and even public safety services such as fire protection to private firms.

Red-Light and Speed

Cameras Automate Traffic

Law Enforcement

The enforcement of traffic laws was once carried out only by police agencies, with officers acting in person upon witnessing a violation or responding to an accident. However, with high-powered computer

technology and internet communications, private firms have developed automated systems that can substitute for a police officer on a roadside or at an intersection. These systems are capable of detecting traffic law violations, identifying vehicles, capturing photographic evidence, and transmitting the information to a central office, which can then issue tickets.

Red-light enforcement systems consist of sensors tied to a traffic signal, plus

Red-light camera systems consist of a camera and strobe light set up to capture evidence of a violation and an image of a vehicle’s license plate, a wireless sensor or video camera set up to detect when a vehicle crosses into the intersection, and a computer system that integrates all of the information and transmits proposed viola- tions to a central office through a network connection. 

cameras mounted on nearby poles. (See photos on page 7 and 8.) In addition to visual evidence of a violation, the systems record supporting information, such as the time after the red signal the vehicle entered the intersection, or the speed at which the vehicle was traveling.3 Some jurisdictions require a positive identification of the driver, as matched by the driver’s license photo on record for the vehicle’s registered owner in order for a ticket to be issued. Speed cameras can be fixed at a single loca- tion, or attached to a mobile trailer. The systems typically submit evidence of any violations to the camera vendor, which then sends proposed tickets to local authorities for approval. The vendor then typically mails a ticket to the registered owner of the vehicle, after obtaining the address from a Department of Motor Vehicles database.

The systems are intended to promote safe driving by deterring drivers from dis- obeying traffic laws. Many communities require signs to be posted before camera- equipped intersections, notifying drivers of the presence of 24 hour-a-day signal monitoring.4 (See photo on page 10.)

Camera Systems are

Spreading Nationwide

Automated traffic enforcement systems are spreading rapidly across the United States.

The city of Jackson, Mississippi, in- stalled the first red-light camera system in the United States in 1992.15 As of Septem- ber 2011, the Insurance Institute for High- way Safety lists 553 municipalities that have installed automated red-light cameras, and nearly 100 that have installed automated speed cameras.16 Based on lists of clients provided by Redflex and American Traffic Services, the two largest camera vendors,

another 113 government authorities have installed or are installing camera enforce- ment systems. In total, 693 communities or government authorities have chosen to deploy camera enforcement systems. These jurisdictions are home to more than 60 million people, or about one in five Americans.17 (See Figure 1. See also “Does Anyone Know How Many Communities Have Automated Traffic Enforcement Contracts?” on page 10 for caveats, and the appendix on page 33 for a full list of communities outsourcing aspects of traffic law enforcement.)

State or local governments must spe- cifically authorize enforcement agencies to cite violators by mail before automated enforcement systems can be used, making the registered vehicle owner responsible for the ticket. Law or judicial precedent must

This camera system identifies violations of red-light signals at an intersection, transmitting evidence and vehicle identification information to the vendor. Ven- dors issue tickets, after approval by local authorities, which are then delivered to the registered owner of the vehicle. Credit: Flickr user Busboy4, Creative Commons

Traffic Safety in the United States: Focusing on Intersections

While traffic safety has steadily improved since the 1970s, driving accidents remain a serious problem. Every year in the United States, more than 30,000 people die in automobile crashes.5 Speeding is a root cause of about a third of these deaths, and crashes at intersections are responsible for about 20 percent. Other fatalities are caused by vehicles leaving roadways, or by accidents involving pedestrians.6

Almost half of crashes causing injuries occur at intersections.7 Within the United States:

• There are about 3 million roadway intersections. About one in 10 of these intersections are governed by traffic signals.8

• About a third of all fatal accidents at intersections occur where there are traffic signals. The remaining two thirds occur where no signal is present.9

• Red-light running is responsible for about 2 percent of all fatal accidents tracked by the Federal Highway Administration, or about 676 deaths per year, nationwide.10

• Fatal crashes at intersections most frequently involve right-angle collisions (45 percent), followed by collisions involving pedestrians or bicyclists (17 percent), head-on collisions (14 percent), single vehicles hitting an object (13 percent), and rear-end collisions (6 percent).11

• One 1999 survey, sponsored by DaimlerChrysler, the American Trauma Soci- ety and the Federal Highway Administration, found that 56 percent of Ameri- can drivers admitted to having ever run a red light.12

also make clear that a photographic record alone is sufficient evidence for a citation. Some laws presume that the registered owner is the driver at the time of violation, but provide a means for owners to identify the driver if it was another person; other laws treat these violations like parking tickets, in which the registered owner is responsible no matter who was driving.18

Laws that target the driver of the ve- hicle typically classify offenses as moving violations. Consequences can include fines, points against a drivers’ license, and a likely

increase in insurance premiums. Laws that treat offenses as a civil matter like parking tickets typically require only fines.

In some areas, citizens have discovered that state authorization laws for privatized traffic enforcement systems leave cities unable to effectively enforce violations captured by camera systems, leading many to simply ignore the tickets. Los Angeles recently decided to cancel its photo en- forcement program largely for this reason.19 Other laws, such as in Florida, automati- cally convert unpaid tickets from civil fines

Privatized Traffic Law Enforcement

Many communities require signs to be posted before camera-equipped intersections, helping to deter violations of traffic laws. Credit: Gary Brown, Creative Commons

to moving violations and then refer them to a collection agency to prevent citizens from ignoring tickets.20

According to the Insurance Institute for Highway Safety, 13 states and Washington, D.C. have specifically authorized the use of automated traffic law enforcement systems statewide. 21 In another 11 states, local or state government has authorized more limited deployment of the systems.22 Alto- gether, 42 state legislatures have considered more than 400 bills addressing privatized traffic law enforcement.23

Does Anyone Know How Many Communities Have Automated Traffic Enforcement Contracts?

There is no official count of how many communities have contracted for red-light camera systems or other automated traffic enforcement. A lack of national regula- tory standards means that no governmental body makes such a tally. The most common number used as an estimate is from the Insurance Institute for Highway Safety (IIHS), a trade group composed of insurance providers, which claimed on its website in September 2011 that, “In the U.S., red-light cameras are used in approximately 553 communities and speed cameras are used in more than 103 jurisdictions.”13

The actual number is likely higher, based on industry records. The two largest red-light camera operators, Redflex and American Traffic Solutions (ATS), provided their own list of jurisdictions under contract in response to our request. Other major companies did not respond to our inquiries or, in the case of the company Affiliated Computer Services, refused to provide information. ATS reports work- ing with 275 governmental bodies and Redflex with 249 communities. Adding the ATS and Redflex lists to the IIHS total and eliminating duplicates yields a tally of 693 communities.

It is not clear, however, exactly how many communities are contracted for red-light cameras as opposed to speed cameras or other technology. Further complicating any clear count of communities is the fact that media accounts sometimes contradict the listings provided by vendors or the IIHS.14

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Caution: Red Light Cameras Ahead

Figure 1: Jurisdictions with Privatized Traffic Law Enforcement Systems24

Population in Jurisdiction

0 to 100,000 100,000 to 300,000

300,000 to 1 million 1 million to 3 million

3 million to 10 million

More than 60 million people live in jurisdictions that have chosen to deploy camera traffic law enforcement systems—about one in five Americans.

Use of privatized traffic law enforce- ment systems appears likely to continue to spread. Camera vendors are beginning to deploy new applications for the technol- ogy, including catching drivers who fail to stop at stop signs, drive past stopped school buses, or leave their cars parked in street sweeping zones. Vendors are also expanding the application of the systems to catch drivers who fail to pay tolls or disobey railroad crossing signals. In 2011, the U.S. Conference of Mayors endorsed a resolution in support of using photo enforcement systems nationwide.25 And camera vendors continue to aggressively market the systems to municipalities across the country.26

Leading Camera Vendors

Three companies supply most of the pri- vate traffic law enforcement systems in the United States.

Redflex Traffic Systems and American Traffic Solutions are the largest suppliers of automated traffic law enforcement systems, each capturing more than 40 percent of the market. Redflex Traffic Systems is a division of Redflex Holdings Limited, an Australian company. It holds more than 250 contracts with American cities in 23 states.27 The company holds the largest single contract, with the city of Chicago, which involves 380 cameras.28 Overall, the company operates on the order of 2,000 camera systems.29 Redflex brought in nearly

Privatized Traffic Law Enforcement 11

$150 million in gross revenue during fiscal year 2011, about three-quarters of which derived from its U.S. operations.30

American Traffic Solutions, based in Scottsdale, Arizona, has contracts with nearly 300 municipalities in 21 states.31 The company manages more than 3,000 cam- eras, covering regions home to about 30 million people.32 The company is privately held, and its overall revenue information is not publicly available, but is likely in the

range of hundreds of millions of dollars annually.

The third-largest provider of traffic enforcement camera systems in the United States is Xerox-owned Affiliated Computer Services, based in Dallas, Texas. This com- pany controls a little more than 10 percent of the U.S. market.33 Other, smaller players include LaserCraft, based in the United Kingdom; Traffipax, based in Germany; and Redspeed, based in Illinois.

The Ongoing Debate over Red-Light Cameras and Safety

There appears to be no well-accepted consensus on whether red-light camera sys- tems are effective at improving safety at intersections. Some researchers suggest that camera systems increase accidents, while others find that the systems offer benefits.

While this report does not evaluate the proper role of camera systems in improving public safety, the documents referenced in the following footnote provide resources addressing the efficacy of camera systems.34

Ultimately, it is up to local government officials to determine how best to guar- antee the safety of walkers, bikers and motorists in their community—and to assess whether automated traffic enforcement is a useful tool in meeting that goal.

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Caution: Red Light Cameras Ahead

Privatized traffic law enforcement sys- tems may be useful in keeping drivers and pedestrians safe. However, when private firms or municipalities consider revenue first and safety second, the public interest will be threatened.

Pitfalls can arise when contracts en- courage vendors to treat automated traffic enforcement systems as a profit center: by maximizing the number of tickets written, regardless of the impact on public safety; by limiting the ability of governments to set traffic safety policies according to community needs; or by constraining the ability of cities to terminate contracts early in the event that automated enforcement systems are rejected by the electorate or fail to meet safety goals.

The budget crises many governments face—coupled with the significant political and marketing clout that camera vendors deploy to expand their market—make it more likely that communities will sign bad deals that favor profit and revenue over safety or other public interests.

Contract Incentives Can

Create Conflicts of Interest

The primary interest of private camera vendors is to maximize profits by earning more revenue and reducing costs. The pri- vate owners of American Traffic Solutions expect business decisions to produce prof- itable returns. The executives of Redflex and Affiliated Computer Services similarly answer to a board and stockholders who presumably demand quarterly returns.

This focus on profit can be clearly seen in Redflex’s annual report to shareholders, where executives describe how “tighter contract language” and “more aggressive collection efforts in key markets” are im- portant tactics the company will deploy to increase return for its investors in the coming year.35 It also appears prominently in the contract that Tallahassee, Florida, originally negotiated with Affiliated Com- puter Services in 2009, which states: “Only sites [for camera system placement] that validate out to a mutually agreed number

Pitfalls in Privatized Traffic Law Enforcement Deals

Pitfalls in Privatized Traffic Law Enforcement Deals 13

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Caution: Red Light Cameras Ahead

of violations per day to meet the required financial obligations to pay the capital- ized investment of the Vendor will be selected unless otherwise mutually agreed by the City and Vendor.”36 (Emphasis added.)

These goals often conflict with the pri- mary interest of municipalities in prevent- ing accidents and protecting their citizens’ health and property.

Contracts between cities and camera system vendors can be written in ways that put revenue first, and put the public interest at risk. The most problematic contracts require cities to divert revenue to the camera vendor on a per-ticket basis. In such contracts, the more tickets a camera system issues, the more profit the vendor collects. So-called “cost-neutral” contracts also contain provisions that link payments to the number of tickets issued, although payments are capped. Both of these pay- ment models can encourage private vendors and public officials to take actions designed primarily to increase the number of cita- tions issued, regardless of the impact on public safety.

Per-Ticket Revenue Formulas

Contracts that link the compensation a private vendor receives with the number of citations issued are inherently prob- lematic—creating a built-in incentive to maximize the issuance of violations, while making public safety a less direct consider- ation. These types of contracts ultimately weaken the public’s trust in the motivation for introducing automated traffic enforce- ment.

The Federal Highway Administration cautions that if a locality contracts with an outside contractor, “The vendor should not be responsible for selecting the sites or should not be paid on a per-ticket basis due to potential conflict of interest issues that may arise from this arrangement.”37

These types of contracts are less com- mon now than a decade ago, and a handful

of states have passed legislation banning this payment method outright. However, contracts directly linking revenue and citations continue to persist in several forms.

For example:

• Some localities divert a set share of public revenue to the camera vendor. For instance, Suffolk County, New York, awards half the revenue from its red-light camera program to camera vendor Affiliated Computer Services.38 The city of Clive, Iowa, has not pub- licly disclosed the proportion, but also shares the revenue generated by each ticket from its red-light camera system with camera vendor Redflex.39

• Some localities divert revenue based on formulas. For instance, Baton Rouge, Louisiana, diverts a variable portion of revenue generated by tick- ets from its photo enforcement system to camera vendor American Traffic Solutions, depending on how quickly citizens respond to fines. For each ticket, the city receives 65 percent of fine collections from the first notice of violation the vendor sends out, and 55 percent if collection requires a second notice.40

• Washington, D.C., added new kinds of volume payments after initially banning such incentives. The city amended its photo enforcement contract with Affiliated Computer Services in 2002 away from a revenue sharing model to a flat fee after crit- ics complained that the program was motivated by profit rather than safety. However, in 2005, while considering the addition of more speed cameras, the city extended its contract and added a provision that granted the vendor extra compensation of roughly $20,000 for each bundle of 2,500

tickets above 53,750 per month that the city’s system issued.41 The con- tract justifies the fee structure—a novel variant of the per-ticket com- pensation scheme—because changes in camera deployment were anticipat- ed to create a “potentially significant increase in volume” of tickets.42

• Tempe, Arizona, may find itself diverting surcharges from traffic school. The city signed a contract with Redflex in 2007 based on a per- ticket revenue model. The city al- lows ticketed drivers to avoid fines by attending traffic school, for which it levies a surcharge. As a result, driv- ers have paid less than a third of the citations issued by its red-light camera system.43 In December 2010, Redflex filed a lawsuit against the city for $1.3 million, plus attorney fees and costs, alleging that the surcharge for traffic school is covered under the revenue- sharing terms of the contract, and that the city should have considered those fees as part of the automated red-light enforcement system, and thus shared the money with Redflex.44

Fee-For-Service Contracts

The least problematic revenue model from a public-interest standpoint is the straight fee-for-service contract. In these contracts, municipalities agree to pay a vendor an up-front charge or a flat monthly fee that covers camera installation, maintenance, violation processing, and any other services the vendor offers, without regard to the number of tickets the system issues.

These revenue models have the advan- tage of removing any incentive to maximize revenue from the self-interest calculation of the camera vendor. The contractor still has an incentive to perform well because errant tickets, lost billing or technical problems with the equipment would displease the municipality, which would then be more

likely to contract with another company at the end of the term.

Fee-for-service contracts also give municipalities a clear picture of the cost of applying the system as part of an overall traffic safety management plan. They bet- ter enable municipalities to weigh whether red-light cameras, or other options to re- duce crashes at intersections, are the most cost-effective way to enhance safety.

One example of a fee-for-service ar- rangement is the Redflex contract with the city of Sacramento, California. In this contract, Redflex charges monthly fees ranging from $3,750 to $4,200 per direc- tion of approach for each of an initial set of 20 intersections, depending on the number of lanes and the type of violation enforced, and then $4,750 to $5,050 for each addi- tional approach at new intersections.45 The contract requires all prices to remain fixed for the duration of the contract (through 2012).46

Conditional “Cost-Neutral”

Contracts

In straight fee-for-service deals, the mu- nicipality takes on all of the risk that the privatized enforcement system might not generate enough revenue to pay for itself. Because of the potentially negative impact on already stressed government finances, municipalities may hesitate to enter into a deal like this without assurance that the program will not be too expensive.

In response—especially in areas where per-ticket revenue formulas are out- lawed—camera vendors often use a new contract model, containing assurances that the contract will be “cost-neutral” for customers. These types of contracts allow camera vendors to market their product as risk-free for the city budget.

These “cost-neutral” contracts share features of both per-ticket and straight fee-for-service deals. Under these con- tracts, cities pay a monthly fee to a camera vendor. However, in the event that ticket

Pitfalls in Privatized Traffic Law Enforcement Deals 15

Payment Terms in “Cost-Neutral” Deals Can Vary

“Cost-neutral” contracts come in a variety of forms.

• Some variants allow the city to collect a minimum amount of revenue before any earnings are owed to the camera vendor. For example, the city of Citrus Heights, California signed a contract with Redflex which specifies that “Before any payment is due to Redflex, Customer shall be entitled to recover the sum of $8,500 per month from the gross cash received from automated red-light violations [...]” based on anticipated city expenses. Any amount above that level can be applied to Redflex invoices, up to the amount that the city has managed to collect by that point.

• Other variants of these contracts require any revenues collected to first be applied to vendor invoices before being directed to any other purpose. For example, Affiliated Computer Services’ contract with Tallahassee, Florida, specifies that any revenues must first be applied to the vendor invoice, includ- ing any balance carried over from previous months, before being deposited in city coffers. Specifically, the contract states, “[w]hen Program Revenues in any given month exceed the total monthly fixed fees owed ACS in such month, then the excess Program Revenues shall be applied first to any cumulative defi- cit or balances due to ACS until all shortfall deficits or balances due are paid in full.”48

• Some contracts require any accumulated deficits to be paid at the end of the contract period. For example, the contract that Ventura, California, signed with camera vendor Redflex, states, “In the event that the contract ends or is terminated and an invoiced balance is still owed to Redflex, all subsequent re- ceipts from automated red-light violations for a period of 12 months from date of termination will be applied to such balance and paid to Redflex, which shall fully satisfy Customer’s payment obligations under the contract.”49

• Others, such as the contract Tallahassee, Florida, has signed with Affiliated Computer Services, allow any payment deficits to expire at the end of the con- tract period.

Whether “cost-neutral” contracts are legal or not in states that have banned per-ticket revenue arrangements is a matter of active legal challenges. For example, several lower-level courts in California have ruled that cost neutral contracts are illegal, but the decisions have not been “published,” and therefore cannot serve as precedent for other court decisions.50

1 Caution: Red Light Cameras Ahead

revenues fail to cover the vendor fee in any given month, cities may delay payment to the vendor.

Because vendor compensation below the defined monthly cap is linked to the number of tickets issued, these types of contracts create incentives for camera vendors to ensure that the camera systems deliver a minimum amount of monthly revenue. This pressure can lead vendors to include contract conditions that threaten the public interest.

For example, when the city of Roseville, California signed an agreement with Red- flex in 2008 for a red-light camera system, the contract contained language that gave Redflex veto power over proposed camera placement to limit its exposure to financial risk. Roseville suggested a set of intersec- tions to the company, but as Roseville Police Spokeswoman Dee Dee Gunther told the Roseville Press Tribune, Redflex “came back and basically said we can’t find any intersections that would be financially feasible for us to do this and still guarantee cost-neutrality,” unless the city agreed to enforce regulations against rolling right turns. The city chose not to do so, and the contract was terminated without breaking ground on any camera installations.47 In other words, the private camera vendor determined that it was not in its financial interest to install cameras to best support Roseville’s safety goals.

Other cities have not been as diligent as Roseville in negotiating deals without terms that undermine the public interest.

Contract Terms Can Limit

Government Discretion to

Set Transportation Policy

Contracts for automated traffic law en- forcement systems can include conditions that limit public control over how to set

and enforce traffic regulations. For example, some contracts impose

financial penalties on cities that undertake safety engineering modifications at inter- sections governed by camera systems—es- pecially when those modifications have an effect on the volume of citations a system can issue, and thus the amount of revenue it can generate. Contracts can also require communities to enforce right-on-red viola- tions, rather than giving local authorities the discretion to decide how to prioritize the enforcement of these infractions in the context of its overall traffic safety goals.

Limiting government authority to set its own safety standards puts the public at risk and diverts traffic law enforcement toward maintaining revenues rather than achiev- ing transportation and safety goals.

Safety-Oriented Intersection

Engineering Changes

At intersections with high rates of crashes caused by red-light running, traffic engi- neers can make engineering changes to reduce collisions. The Federal Highway Administration (FHWA) considers engi- neering, education and enforcement the three pillars of an effective program to address red-light running.

Education can help drivers learn how to better respond to signals and become more aware of the consequences of reck- less driving decisions. Enforcement can provide incentives for drivers to behave cautiously, incentives which become stron- ger as the fines become higher and more certain. These two tools are well suited for influencing driver behavior.

However, deficiencies with the inter- section itself that contribute to red-light running can only be addressed through engineering. FHWA recommends “that a traffic engineer be called upon to review the intersection and approach geometry, signal timing details, and other relevant engineering features to ensure that the red-light-running problem [at a given in-

Pitfalls in Privatized Traffic Law Enforcement Deals 17

tersection] is behavioral and not the result of an engineering shortcoming. Cameras should be considered/installed only after engineering solutions have been proven ineffective where there is a red-light-run- ning problem.”51

Possible engineering measures that may reduce accident frequency at intersections include:53

• Increasing signal and intersection visibility so that traffic lights can be seen more clearly and from a greater distance;

• Adding intersection warning sig- nals, painting more visible pavement markings, or reducing the speed limit approaching the intersection;

• Providing sufficient yellow signal duration to give drivers enough time to react to the signal change, based on the speed of traffic, the road grade, the intersection width, and other factors;

• Adding an all-red signal interval to give traffic time to clear before releas- ing cross-traffic;

• Coordinating signals to improve traffic flow;

• Adding turn lanes and/or exclusive turn signal phases to reduce driver exposure;

• Transforming the intersection into a roundabout, or otherwise altering the geometry of the intersection.

Contracts for automated traffic law en- forcement systems that limit local authori- ties’ ability to implement safety changes are not in the public’s best interest.

Yellow Light Duration

When traffic engineers lengthen a yel- low signal at an intersection, drivers have more time to react to a signal change. This tends to reduce the number of accidental red-light violations. For example, the Texas Transportation Institute studied three years’ worth of police reports at more than 180 intersections in Texas. The organiza- tion found that when yellow light duration was one second shorter than international guidelines, red-light violations doubled. When yellow light duration was extended one second beyond guidelines, red-light violations fell by half.54

Resources for Increasing Intersection Safety

The Federal Highway Administration maintains a wealth of resources online describing different traffic engineering solutions—such as making signals more visible, improving driver awareness of an upcoming intersection, altering intersection design, or improving the operation of signals—that communities can use to increase intersection safety. Improving driver compliance with red lights is just one among a number of possible actions to reduce crashes. For further information, including sample intersection safety action plans that provide guidance on how to identify and deploy cost-effective and publicly acceptable safety strategies, see the Federal High- way Administration’s Office of Safety website at safety.fhwa.dot.gov/intersection.

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Caution: Red Light Cameras Ahead

Increasing Visibility

One signal head per lane

Intersection Safety

IImproving Design

Roundabouts

New alignment

12” Lenses

Backplates

Turn lanes

22

25

New alignment

Reduce skew

Intersection Safety

PPhoto credits: Federal Highway Administration

Pitfalls in Privatized Traffic Law Enforcement Deals 1

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Caution: Red Light Cameras Ahead

“Cameras should be considered/installed only after engineering solutions have been proven ineffective where there is a red-light-running problem.”

– Federal Highway Administration Guidance for Implementing Red-Light Camera Systems52

In its guidance for implementing red- light camera systems, the Federal Highway Administration notes that “[c]hanges in the yellow times after red-light camera systems are in place and operational will affect the number of photographed violations, increasing the number of violations when yellow times are shortened and reducing the number of violations when yellow times are lengthened.”55

Accordingly, decisions affecting yellow light timing at an intersection monitored by an automated traffic signal enforce- ment system affect the number of tickets a system can issue—and thus, the amount of revenue that it can generate.

Some contracts that municipalities have signed with camera vendors include provisions that inhibit local authorities from determining and setting their own appropriate yellow light timing. For example, the city of Bell Gardens, Cali- fornia signed a contract with Redflex in 2008 that would penalize the city if it chooses to alter yellow light timing at intersections where cameras are installed. Contract language gives Redflex the op- tion to penalize the city by nullifying the cost-neutral protections in the contract if it “fails to maintain the minimum yellow light change interval as established by the Institute of Transportation Engineers [ITE].”56 The cities of Citrus Heights, Hawthorne and Corona, California

have similarly structured contracts with Redflex.57

In 2001, a lawsuit against San Diego’s camera program revealed documents showing that the vendor prioritized in- tersections with short yellow signal tim- ing, high traffic volume, and downhill approaches—all factors that would tend to increase citation volume and thus rev- enue—for camera placement. The inter- sections where cameras were placed were not necessarily the intersections with the largest number of accidents.58

Right-on-Red Enforcement

Law enforcement agencies in different cities choose which types of violations to prioritize in the name of public safety, in- cluding whether or not to ticket motorists who make a “rolling stop” rather than a complete stop behind the line before turn- ing right on a red light. Different states and localities treat these situations differently and police officers normally use their own discretion. A car that barely pauses before a right turn that forces school children to scatter on a crowded corner might be treated differently than a rolling right turn at an empty intersection, for instance.

In Green Cove Springs, Florida, a judge has rejected all red-light violations during right turns that are contested in court, saying “State law isn’t precise enough in defining what the cameras must depict to make a valid case against drivers in such cases.”59 None- theless, reportedly, most people who receive fines pay them without a challenge.

With automated camera systems, the number of fines issued will largely be determined by how the vendor programs the criteria for identifying a right-on-red violation into the device by the camera vendor, typically in consultation with the local jurisdiction. Any further discretions would involve employees of the camera vendor who review evidence of a violation, or later review by a representative of the local jurisdiction.

When camera vendors are even par- tially compensated based on the number of citations issued, the companies have a financial interest in stricter enforcement of red-light turn violations. Including these violations within an enforcement program can dramatically increase the number of citations a photo enforcement system is- sues, and therefore improve the company’s bottom line.

For example, in Baton Rouge, Louisiana, violations recorded by a camera system more than quadrupled in the month after it was set to detect rolling right turns.60 In the city of Los Angeles, three-quarters of all photo-enforcement tickets issued in the first nine months of the year 2010 cited red-light violations on a right hand turn.61 At one intersection, 91 percent of tickets were for right-hand turns;62 at another intersection rolling right turns accounted for 97 percent of all citations issued.63

Reflecting camera vendors’ interests, some contracts reduce the ability of mu- nicipalities to make their own decisions on how to address right turn violations.

In some cases, contract terms require municipalities to strictly issue tickets on all right turns that do not first come to a complete stop, or enable vendors to impose financial penalties on cities that choose to alter their enforcement standards.

For example:

• The contracts between the cities of San Carlos and Belmont, California, and Redflex simply say “Customer agrees to enforce all right hand turn violations.”64 The consequence for not enforcing right turn violations is unclear in the contract language, but presumably could involve financial penalties or litigation.

• Redflex’s contract with Ventura, California, leaves the door open for the company to penalize the city if “the city fails to enforce right turn

violations (from automated red-light violations), in good faith and due diligence, if and when systems are configured for this purpose as mutu- ally agreed between Redflex and the City.”65 Redflex added this measure to the contract with Ventura in an amendment adopted in November 2008—previously the company had invoiced more than $1.7 million to the city that went unpaid because of the “cost neutrality” language in the pay- ment terms of the contract.66 Other California cities with contracts similar to Ventura’s include Citrus Heights, Bakersfield, Bell Gardens, Lynwood, and Walnut. 67

Contracts often require the city to give the camera vendor a voice in developing the standards for what constitutes a viola- tion of the red signal during a right turn. For example,

• Tallahassee, Florida, signed a con- tract that assigns Affiliated Computer Services to “Develop the Program Infraction criteria and Enforcement Documentation (collectively the “Business Rules”), sample Notice of Violation and other relevant

When camera vendors are even partially compensated based on the number of citations issued, the companies have a financial interest in stricter enforcement of red-light turn viola- tions. Credit: Flutter Media

Pitfalls in Privatized Traffic Law Enforcement Deals 21

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Caution: Red Light Cameras Ahead

documents for approval by the City”. 68 And Citrus Heights, California, signed a contract that gives Redflex the responsibility to “Develop the Redlight Violation Criteria in consul- tation with the Customer.” 69

Ticket Quotas

Contracts for photo enforcement systems typically do not give camera vendors the authority to issue citations. Contracts often contain, in all-capital letters, the text:

[Vendor] hereby acknowledges and agrees that the decision to issue a citation shall be the sole, unilateral and exclusive decision of the authorized officer and shall be made in such authorized officer’s sole discretion (a “citation decision”), and in no event shall [Vendor] have the ability or authorization to make a cita- tion decision.

Law-enforcement decisions about when to ticket remain, at least formally, in the hands of police officers. Citizens may regard this as important because they want decisions about when the force of law should be applied against individuals to remain in the hands of public officers who are accountable to democratically elected representatives. However, when contracts penalize municipalities that do not approve enough tickets, then police policies and discretion will likely be tilted to avoid those penalties. One way this can happen is to effectively set a ticket quota, which undermines the authority of local officials to decide which violations warrant citations.

For example, the contract between Wal- nut, California and Redflex states that the city could pay a financial penalty if “the City or Police waives more than 10 percent of valid violations forwarded to the Police for acceptance.” 70 Roseville, California signed a contract with Redflex in 2008 that contained the same provision.71

Contracts Can Penalize

Communities for Early

Termination

An important issue concerning the priva- tization of municipal services is whether it creates new risks for municipalities by locking them into arrangements that will be painful to undo if unexpected problems arise or results are worse than expected.

In other activities where municipali- ties have more traditionally outsourced services such as garbage collection and building maintenance, communities very often decide to bring functions back in- house after experimenting with privatiza- tion. In fact, research by Mildred Warner at Cornell University and others examines regular surveys of local governments that have been conducted since 1982. The research shows that since 1997 local governments have brought activities back into government provision more often than outsourced new activities.72 Some of the areas where contracting back in outpaces the rate of outsourcing include traffic-related activities such as traffic signs, street signs, street plowing and street cleaning.73 According to surveys of government managers, the most common reason given for reversals are problems with service quality followed by lack of cost savings, improvements to government efficiency, problems with monitoring con- tractors, and citizen support for bringing the work back in-house.74 The surveys also show that city managers who moni- tor outsourcing contracts more closely are more likely to reverse the outsourcing subsequently.75

These concerns are likely to apply with deals outsourcing aspects of traffic law enforcement as well. In dozens of loca- tions, citizens groups dissatisfied with the service have brought up ballot measures to eliminate camera systems. Other jurisdic- tions have encountered unexpected costs, including increased courtroom traffic.

For example, Miami-Dade traffic courts handled 20,000 red-light citation cases in August 2011, virtually filling up all avail- able courtroom space.76

The point is not that municipalities should not consider privatizing certain ser- vices or experiment with outsourcing. But a common experience of other municipalities across a variety of activities is that it often does not work out. Transition costs can therefore be very important. Contracts that stipulate high costs and rigid conditions for bringing activities back in-house impose risks on municipalities and can leave com- munities locked into arrangements they do not want.

Many automated traffic law enforce- ment contracts create risk by penalizing municipalities or leaving them exposed to costly and disruptive lawsuits in the case of early termination of the contract, leaving taxpayers on the hook even if the camera system fails to meet community objectives. Contract terms that keep municipalities locked in with heavy cancellation fees or threaten them with expensive litigation if they change their minds are not in the best interests of the public.

• Some contracts specify that if the city terminates the contract early the city will owe the vendor cancellation fees. For example, under Belmont, California’s contract with Redflex, the city would owe as much as $80,000 per approach (with up to 4 approaches per intersection) if it chose to with- draw from the contract before it expired.77 In Tallahassee, Florida, if the city cancels its contract with ACS for reasons of convenience, it will owe a cancellation fee of $100,000, in addi- tion to any unpaid balances, no matter how much revenue the program has collected over time.78

• Other unexpected risks, as previ- ously mentioned, can take the form

of vendors suspending protections on “cost-neutral” contracts. For example, Ventura, California’s “cost-neutral” contract with Redflex stipulates that, should there be a balance remaining in the invoice due Redflex at the end of the contract term, revenues from an additional 12 months of camera opera- tion will be applied to pay the deficit. Many “cost-neutral” contracts specify that cities will no longer be able to de- fer monthly payments “If systems are deactivated due to customer require- ment.” 79 Moreover, many contracts state that “If a system is deactivated at the Customer’s request, the monthly fee will continue.”80

These contracts have created real prob- lems for cities that moved to cancel their photo enforcement programs when they failed to meet safety goals, when they cost more than anticipated, or when citizens reacted angrily to the introduction of camera systems.

Houston, Texas

In 2006, Houston signed a contract with vendor American Traffic Solutions for a photo red-light enforcement program. Over the next four years, the system col- lected more than $44 million in fines.81

A group of citizens launched a ballot ini- tiative to eliminate the camera program.82 The group managed to place the initiative on the November 2010 ballot, and won convincingly, despite the fact that a group called Keep Houston Safe, largely funded by American Traffic Solutions, spent on the order of $1.5 million on a legal and public relations effort to defend the contract.83

After the vote, American Traffic Solu- tions filed suit in federal court to keep the cameras in place.

Houston had renegotiated its contract in 2009, eliminating the provision that gave the city the option to terminate the contract for convenience without penalty.

Pitfalls in Privatized Traffic Law Enforcement Deals 23

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Caution: Red Light Cameras Ahead

Instead, the city agreed to a new contract that clearly stated that the agreement “remains in effect until May 27, 2014,” without option to terminate.84 The new contract was an attempt by the city to keep its photo enforcement program in place, even if the state legislature passed a bill that would ban new contracts or contract extensions for privatized traffic law enforcement.85

In June 2011, a federal judge decided that the results of the election were in- valid. The city, under budgetary pressure, decided to restart the camera enforce- ment program. Houston Mayor Annise Parker said in a statement: “The City just went through a very painful budget process in which nearly 750 employees were laid off and park, library and health services were cut back. We simply don’t have the millions they claim we would owe for violating the court decision and our contractual obligation to American Traffic Solutions (ATS). Therefore, I have decided the fiscally-prudent path to take is to turn the cameras back on while also seeking a second chance for the voters in the courts.”86

During ongoing talks, American Traffic Solutions asked the city for $18 million to settle the contract dispute. In response, Mayor Parker declared that the company was out of bounds and asked the city council to vote on a resolution to shut off the cameras and ban them outright. The council obliged in August 2011, and city officials again deactivated the camera program.87

In response, American Traffic Solutions upped its demand for early termination to $25 million. Andy Taylor, lawyer for the company, told the Houston Chronicle, “Houston has always enjoyed for decades a great business reputation where a deal is a deal. In the courthouse they call that the sanctity of contract. Today, the City Council tarnished the reputation of the city by throwing out a valid agreement with our

company. [...] As a result of throwing it out, it’s going to make the streets of Houston less safe, and it’s also going to open up, I’m sad to say, the taxpayers to liability to the tune of millions of dollars.”

As of the publication of this report, this dispute remains unsettled.

Baytown, Texas

The city of Baytown, Texas, signed a five year contract in 2008 for a red-light camera system with American Traffic Solutions. In May 2009, the city amended the agreement to extend for 15 years. Under the payment terms of the contract, the city shared a percentage of the revenue from each ticket with the camera vendor.88

However, in November 2010, citizens voted to end the program. Citizens op- posed to the camera program collected sig- natures for a ballot initiative that required the physical presence of a uniformed officer at an intersection before a red-light ticket could be issued. The ballot initiative passed with 58 percent of the vote.89

In order to comply with the results of the election, the city drastically reduced the number of approvals of potential violations captured by the American Traffic Solutions system, since it did not have the personnel to ensure the presence of an officer at every camera location all the time. In December 2010, the city only approved 21 percent of citations, and in the first week of January 2011, it approved none.90

In response, in February 2011, American Traffic Solutions filed a lawsuit against Baytown, alleging breach of contract be- cause the city was not approving enough tickets.91 The company also discontinued operation of the system.

Andy Taylor, lawyer for the vendor, wrote to Baytown officials, “the entire purpose of the program is to automate the detection of red-light runners without the necessity of relying upon personal obser- vation by a peace officer. By changing the program to require personal observation

of red-light running by a peace officer, the city has unilaterally breached the material terms of the agreement.”92

City lawyers countered that the vendor was responsible for complying with all local laws and regulations under the contract, and that the new law created by the citizen vote was no different.93

In August 2011, Baytown settled the dispute by authorizing a $1 million pay- ment to American Traffic Solutions and nullifying the ballot initiative in exchange for early camera removal.94

San Bernardino, California

San Bernardino began a contract for photo red-light enforcement with Nestor Sys- tems in 2005. American Traffic Solutions took over the company and the contract in 2009. The contract term extended through 2014 for the last authorized camera system.

In January 2011, the San Bernardino chief of police recommended to the city council that the city extend the contract and add cameras. However, based on tes- timony over the proposal, the city council decided “that the City has lost business because of the red-light cameras and they’re not making the City any safer.”95 In other words, the council decided that the program was not meeting its objectives. Council members instructed the city man- ager to develop a set of recommendations for exiting the contract early.96

In March 2011, the chief of police told the city council that exiting the contract would trigger about $110,000 in fees to American Traffic Solutions. Judging the fee acceptable, the council voted to exit the contract early.

However, the city’s estimate was flawed. American Traffic Solutions came back to the city, saying that in fact, the termination fee would approach $1.9 million.97 The city balked at the high cost, and allowed the traffic cameras to continue operating.98 The city attorney and the police chief

began a public disagreement, and the police chief decided to resign.99

The city eventually gave up on its effort to abort the red-light camera contract. In September 2011, the city council voted to extend the operation of its camera system through July 2014, upgrading some cameras and moving some to new intersections. American Traffic Solutions expects to earn $2.4 million in revenue from the deal.100

Victorville, California

In March 2011, activists gathered at the Victorville, California, city council meet- ing and urged council members to end the city’s photo red-light enforcement program. At the meeting, city manager Jim Cox told the city council that when asked about the possibility of terminating their contract early, Redflex responded, “There is no provision in the contract for the City to buy their way out of the exist- ing contract.”101

He concluded that, unless Redflex re- lented, “the only way that we can cancel the contract is to not live by the terms, which would cause litigation.”102

Victorville had originally signed a con- tract with Redflex in 2007. This contract allowed the city to terminate the agreement for any reason, but only within one year after the date of camera installation.103 In July 2010, the city negotiated with Redflex to remove six cameras while extending the contract for the remaining 10 cameras to 2014. This contract did not add any new early termination language, leaving Vic- torville with no option to end service if it so chose.104

The city hired a lawyer to investigate its options, who concluded that “Redflex is unfortunately not so reasonable. They are only interested in making as much money as possible before the cameras are removed.”105

As of the publication of this report, Vic- torville has yet to reach a solution.

Pitfalls in Privatized Traffic Law Enforcement Deals 25

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Caution: Red Light Cameras Ahead

Loma Linda, California

In 2009, the city of Loma Linda, Cali- fornia, lengthened the yellow light dura- tion at camera-enforced intersections, dramatically reducing the number of straight-through and left turn viola- tions.106 When city council members, under pressure from citizens upset about receiving tickets primarily for right turn on red violations, moved to cancel the photo enforcement contract, Redflex threatened to charge the city more than a half million dollars.107

Loma Linda decided to finish out the term of its contract and allow the program to expire in December 2010.108

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