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Colorado: City Dumps Camera Plan Over Revenue Concern

July 6, 2009

Colorado: City Dumps Camera Plan Over Revenue Concern
Thornton, Colorado drops red light camera idea after failing to secure a guaranteed profit.  

Thornton, ColoradoThe city of Thornton, Colorado decided last week to drop the idea of installing red light cameras after spending more than a year attempting to make the idea work. In the end, the city council was unable to arrive at an acceptable guarantee that, no matter what, the program would make money. A directive handed down by city leaders last year explained the primary objective.

“Council’s explicit expectation was that the total costs to operate a Photo Red Light Enforcement system, including service, equipment and city staff costs, were to be equal to or less than the fines received from operating the system, thus resulting in no cost for the city to implement,” a November 2008 memo from the city manager explained.

Two potential vendors, American Traffic Solutions (ATS) and Australia’s Redflex Traffic Systems, were up to the challenge. Both proposed “cost neutral” contracts by which the companies would charge for its services based on the number of traffic citations issued up to a cap of $5000 per intersection approach per month.

Another camera vendor, Affiliated Computer Services (ACS), refused to offer this cost neutrality option because the arrangement “by its nature includes a link to revenue generated by photo red light equipment.” The company warned the city that this requirement was contrary to a state law that mandates that private photo enforcement companies be paid a flat-rate fee.

“No portion of any fine collected through the use of such system may be paid to the manufacturer or vendor of the automated vehicle identification system equipment,” Colorado Revised Statutes 42-4-110.5 states. “The compensation paid by the state, county, city and county, or municipality for such equipment shall be based upon the value of such equipment and may not be based upon the number of traffic citations issued or revenue generated by such equipment.”

Even city staff grew uncomfortable with the idea.

“There is concern by the RFP selection committee that the guaranteed cost neutral models presented by the service providers are not in compliance with the state statute,” the November memo explained. “The city attorney’s office is also hesitant about the guaranteed cost neutral programs proposed by the vendors… The service providers have varying methods of how compliance with the statute is achieved, none of which have been subjected to scrutiny in court.”

Despite this warning and the city manager’s recommendation to drop the idea, the council ordered that the program should proceed. As long as the city did not have to bear the consequences for breaking the law, the council was happy to move forward on the project.

“Council requested that the service providers agree in writing to indemnify the city for all costs if a court were to determine that a cost-neutral approach violates state statute,” the city manager explained in a February 19, 2009 memo.

In order to land the potentially lucrative deal, ATS agreed to this stipulation. Redflex refused. ATS then began exploring which intersections would be most profitable locations to place red light cameras. It found three high-volume approaches that could sustain revenue generation of $100,000 to more than $200,000 per month.

A Thornton Parkway and Huron Street, the only “violations” recorded were right turns on red that would generate an estimated $161,000 in monthly revenue. The east and southbound approaches of 84th Avenue and Washington Street would generate $377,000 in revenue, even though only one straight through violation was recorded during the entire test. The only recommended intersection with through violations was 104th Avenue and Colorado Boulevard, which promised just $100,000 in revenue each month.

Officials were also concerned with the amount of time police officers would spend pouring over photographs and videotapes to ensure no innocent driver ever receives a citation in error. Vendors reassured the city that this would not be a problem. According to ATS, only 2.5 hours a month were needed to “review” the fines issued by the company at each approach, based on spending 30 seconds on each ticket.

Ultimately, the city and vendors could not agree on the final terms of the deal.

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