What do you do when the political pressure is on and no one wants to buy your accident-increasing intersection surveillance equipment?
Offer so-called “cost-neutral” contracts to cities, so you can receive 100% of the revenue from a specific intersection– up to $6,000 per month.
The catch? In many places, these types of contracts are illegal, reports TheNewspaper.com:
Fear of litigation is causing some California cities to think twice about red light camera contracts containing so-called “cost neutrality” provisions. On Tuesday, the Turlock City Council decided to drop the idea of red light cameras for good.
“We will not be bringing them back to you,” Turlock Police Chief Gary R. Hampton said. “Litigation on the whole red light camera issue continues…”
“A cost neutrality clause provision in the contract assures that the city of Turlock will never be required to pay Redflex more than actual net revenue received from the program,” Hampton explained in a memo to the council… for each intersection approach, Redflex was to be compensated at 100 percent of the revenue collected from each ticket, with the amount capped at $6000 per intersection approach each month. This scheme ran afoul of state law banning per-ticket compensation, according to a November appellate ruling by a California Superior Court judge. The court found that a similar cost neutrality deal struck between the city of Fullerton and Nestor Traffic Systems (NTS) was illegal and all tickets issued by the system were declared void.
Vice Mayor Ted Howze during the April 28 city council meeting asked to the city delay the proposed contract after a concerned citizen warned that a lawsuit over the illegal contract arrangement could result in a multi-million dollar refund, as happened in Minnesota.
It’s important to note it’s $6,000 per approach. Redflex prefers at least “two-approach” coverage for intersections, and four-approach isn’t unheard of.
Theoretically, a four-approach system generating $6,000 each could generate over $288,000 a year for Redflex for just one intersection, reaffirming our long held position: All they want to do is take your money.