Dozens of cities across California still pay red-light camera
vendors based on the revenue their tickets generate, even though such
contracts have been outlawed by the Legislature and ruled illegal in
Orange County court. The details are technical and still
contested but the spirit of the law is clear: Camera vendors shouldn’t
have a financial incentive to target motorists unfairly.

In Orange County, Laguna Woods has a contract that appears to be in
violation of the law. Costa Mesa’s contract doesn’t meet the test of
current law either, but because the contract was signed in 2003, before
the law changed, it is not required to conform. City officials say they
want to renegotiate to make their contract meet current law but haven’t
been able to reach agreement with their vendor.

Los Alamitos
changed its photo enforcement contract in June after an Orange County
Superior Court commissioner dismissed a ticket handed out under its
revenue-based agreement. Los Alamitos had installed red-light cameras
in 2005 after regulations were tightened.

"If the sincere
intent is about safety, (money) should not be a factor," says state
Sen. Jenny Oropeza, D-Long Beach, who sponsored legislation tightening
the red-light camera regulations in 2004. "The fact they’re setting
them up in a way where the citations for running a red light somehow
fit with how they charge the contracts, that makes me a little nervous.
I don’t think there should be that nexus at all."

Not everyone
agrees. Red-light camera vendors and at least one other California
judge contend that revenue-based contracts that include a monthly
payment cap are legal. Orange County cities with the questionable
contracts say their ticket revenue always exceeds the cap, which they
say makes the incentive argument meaningless.

"If anything, (the
contract) limits the amount of revenue a vendor can take in. It’s
mincing words when you say it’s a violation of the vehicle code because
it’s based on some percentage or not," says Seth Fogel, who works for
one of the two red-light camera vendors working in Orange County,
Redflex Traffic Systems Inc.

Either way, a review of the
red-light camera contracts in place in Orange County indicates that the
vendors are doing far better than the cities.

Santa Ana pays
its vendor, Redflex, more than $1.2 million a year, its contract
indicates. Nestor Traffic Systems, Costa Mesa’s vendor, is collecting
nearly $1.1 million a year for monitoring four intersections. The
smaller cities generate less revenue: Redflex collects $328,000 a year
from Laguna Woods and $206,000 from Los Alamitos.

Most cities
are not doing quite as well. When the cost of paying vendors is
subtracted from ticket revenue, Costa Mesa appears to be losing more
than $240,000 a year, not counting the city’s personnel costs. San Juan
Capistrano collects just $17,000 a year, not enough to pay the deputy
who reviews the tickets there. Laguna Woods nearly broke even, coming
up $678 short during the 12-month period reviewed.

Some cities
do make money on the program. Los Alamitos netted more than $400,000 in
the year ending in August. And Santa Ana collects nearly $817,000 a
year. Those numbers exclude the cost of employees dedicated to running
the program, which in Santa Ana’s case is more than $500,000 a year.

City officials say that safety – not money – is the focus when they measure the programs’ successes.

The
questionable camera contracts remained widely unnoticed in Orange
County courts until January, when Huntington Beach resident Nelson
Nagai decided to fight his ticket.

Nagai, who works in
procurement at Northrop Grumman Corp., doesn’t dispute that he ran a
red light in December, when he sped up to beat a yellow light while
turning left from Katella Avenue to Los Alamitos Boulevard.

Still,
when the incriminating photo and citation showed up in the mail, he
cringed at the thought of forking over more than $400 for the ticket
and traffic school. He had successfully fought traffic tickets in the
past, so he turned to the Internet for advice and found the anti-photo
enforcement site, highwayrobbery.net.

"If it was $100, I probably would have paid it," Nagai says. "But I don’t have any points on my insurance. So I gave it a shot."

Nagai
spent about three hours researching his defense, even returning to the
intersection to make sure the signal’s timing was correct (it was) and
the proper warning signs were in place (they were).

He learned
how photo enforcement programs work: The vendors’ employees get the
first look at the photos and pull DMV records for the registered owners
of violating cars. They do an initial review, throwing out citations
where a license plate number isn’t visible or you can’t see a driver’s
face.

Then they send the information electronically to a police
department, where a sworn officer reviews each violation and makes a
final judgment on which citations to send out. The officers who review
the citations also sometimes testify in court when motorists contest
their tickets.

When Nagai headed to court Jan. 23, he was hoping
a police officer wouldn’t show up (one did). His backup plan was to
argue the city’s contract was illegal, as he had learned on the Web
site. Problem was, he didn’t have a copy of the contract as proof.

He
got lucky. Superior Court Commissioner Ken Schwartz had pulled Los
Alamitos’ contract before Nagai’s case was called. So when he pleaded
not guilty, the commissioner dismissed the citation with little
discussion and issued an opinion opposing the agreements, Nagai says.

Schwartz declined to comment for this story, but police officers in other cities say he has a reputation of fairness.

"Schwartz
is by the letter of the law," Garden Grove Police Lt. Todd Elgin says.
"He’s really sure that law enforcement dots its I’s and crosses its
T’s. I think he believes in the system, but I think he wants to make
sure that everybody follows the rules."

Schwartz’s ruling does
not set a legal precedent. In fact, in 2006 a Yuba County judge decided
in favor of contracts like the one that Schwartz ruled illegal. But the
decision could weaken court cases for the dozens of cities with similar
provisions, which are included in "boiler plate" contracts for at least
one of the state’s major vendors.

"A respected commissioner
writing an opinion that way … is going to have persuasive authority in
arguments in front of other commissioners," Newport Beach traffic
attorney Arthur Tait says.

Pay-by-ticket contracts were common in
California until 2004, when state senators approved tighter guidelines
amid concerns that camera programs could be manipulated for profit.

The
law was passed on the heels of a 2001 case in which a San Diego judge
dismissed nearly 300 citations after learning that changes to the
camera triggers had caused innocent people to appear guilty on camera.

The
judge found that San Diego’s pay-by-ticket arrangement created a
conflict of interest and he ruled that its program violated a state law
requiring the government – not private companies – to operate photo
enforcement programs, says Tait, one of the defense attorneys on the
case.

After the law was revised, vendors devised contract
provisions – like the one used by Laguna Woods – as a way to guarantee
that cities won’t have to pay out-of-pocket for red-light camera
enforcement.

The language of the questionable provisions varies
by city, but the terms generally are the same: A maximum monthly
payment, often characterized as a flat fee, is established. But if a
city’s share of citation revenue doesn’t cover the fee, it doesn’t have
to pay the difference.

Laguna Woods pays $27,350 a month to
monitor five directions of traffic in two intersections. If the revenue
generated from all the approaches doesn’t make enough money to cover
the monthly payment, then the city’s vendor Redflex lowers the monthly
fee or issues a cash-back refund of the difference.

Schwartz
ruled in the Los Alamitos case that a similar type of payment method
would "embolden the supplier to store more data and develop broader
criteria" for consideration, helping ensure ticket revenue reaches the
monthly fee amount.

Laguna Woods’ assistant city manager Douglas Reilly doesn’t believe the terms of the contract amount to an incentive.

Reilly
says Redflex suggested the provision because the city expressed concern
about being able to cover its costs. Ticket revenue has waned since
red-light cameras were installed at two intersections in 2005, but has
never fallen below the monthly fee, Reilly says.

Because
deputies have the final say on which citations are issued and traffic
engineers set signal timing, Reilly wonders how Redflex could even go
about boosting the number of tickets issued if they wanted to.

"There’s nothing they control," he says.

Defense attorney Tait disagrees.

"This
agreement appears to be a clear violation of state law because it makes
fees contingent on revenue – the company gets paid if the computers
accuse people of crime," Tait says after reviewing the Laguna Woods
contract. "And this is not only unlawful in California, it is a
violation of the U.S. Constitution and wholly un-American."

Seven Orange County cities enforce red-light laws with photo enforcement programs.

Costa
Mesa pays its vendor, Nestor, on a sliding scale based on how many
tickets each camera issues per month. Because that contract was signed
before 2004, the city isn’t required to comply with the regulations
because its contract was grandfathered in.

Negotiations to bring
Costa Mesa’s contract up to current standards have been slowed because
of equipment and legal issues. The city briefly suspended its red-light
program in 2005 after a judge dismissed a ticket issued at an
intersection where drivers weren’t given a warning period before the
cameras started doling out fines.

"There hasn’t been any
conscious decision not to bring the contract payment into conformity
with the law," Barlow, Costa Mesa’s attorney, says. Regardless, she
says, the current contract hasn’t amounted to an incentive because
officers review every citation before sending them out.

Fullerton
and San Juan Capistrano have weaker protections in their contracts,
agreeing to renegotiate their fees annually if ticket revenue isn’t
high enough to cover their vendor costs.

Santa Ana and San Juan Capistrano pay their vendors a flat monthly fee.

Santa
Ana Police Cmdr. Paul Gonsalves fears that revenue-based contracts in
other cities could cast a negative light on a program he says is saving
lives.

"It’s going to taint not only our system but every
successful system," Gonsalves says. "It also might shine light on the
fact that if you do things aboveboard like us, you can run a successful
program."

Via the Orange County Register