Maryland Speed Camera Program: Scams, Conflicts of Interest Everywhere

January 26, 2009

When he Maryland Legislature authorized Montgomery County to use speed cameras in 2006, the people were given certain assurances. One was that there would be no per-ticket payments to speed camera contractors, which would create a financial incentive for contractors to “cheat” to maximize profits. Another was that they would only be used in “residential and school zones”, not major arterial roads. And finally, that they would not be used as cash cows for local governments by earmarking the revenues for (undefined) “public safety” improvements. All of those promises were given to the driving public – and ALL of those promises have since been broken by the Montgomery County Speed Camera Program.

The no-per-ticket-payment requirement was discussed in local government planning sessions and County Council Sessions prior to bidding on the contract, including a comment by now council president Phil Andrews on the May 8th, 2006 that “contractors are not paid based on the number of citations, that’s built-in” (transcript, pdf). Nonetheless the county signed a contract with ACS State and Local Solutions in 2007 which pays the greater of $3000 per van or $16.25 per citation per fully paid citation. That is in violation of article 21-809(j) which states “If a contractor operates a speed monitoring system on behalf of Montgomery County, the contractor’s fee may not be contingent on the number of citations issued or paid.”

Had the county been open with the public about this after citizens started to take issue, and then promptly renegotiated its contract, this might have been the end of this. But the county had a financial conflict of interest of its own: this contract was also designed to maximize profits for Montgomery County. Instead, they attempted to deceive the public while 2008 legislation authorizing statewide speed cameras was being voted on in March 2008. On March 15th 2008, County Executive Ike Leggett stated in an online town hall session in response to a question about why the county was paying its contractor a 40% cut of the speed camera revenues by stating “Under the contract, we pay a flat fee” (transcript). The 2008 legislation contained a subtle change to the law — changing the definition of a speed monitoring system operator from “an individual who operates” to “A REPRESENTATIVE OF AN AGENCY”. That would have allowed the county to designate anyone they choose as the “operator” of the system, and put into law a “loophole” which the county was trying to use as legal cover. Fortunately, the legislative session ended before the house and senate could reconcile minor differences and make it law.
On May 15th, 2008, County executive Leggett stated that the county would renegotiate its contract. But because of the county’s financial conflict, they instead continued to expand the program. That expansion included the city of Takoma Park signing an agreement to join the contract in September 22, 2008. The resolution appears to require ACS to make a profit for the city:

If the total of the City’s paid citation revenues are less than $2,999.00 per month per mobile unit for two consecutive months or for any two months in a six-month period during the term of the agreement or any renewals, the contract provides for a renegotiation of the per citation rate and/or the monthly minimum compensation payable to the contractor. If the City, in its sole discretion, is not satisfied with the results of such renegotiation or with the revenues derived from the photo speed enforcement program or the City determines that photo speed enforcement is no longer an appropriate enforcement mechanism for the City, then the City may terminate this Agreement for convenience….

Other promises given by the county and state have also proven empty. The requirement that cameras would only be used in “residential and school zones” became meaningless when major 4-6 lane commuter routes such as Connecticut Avenue were used. Other residential zones, have few or no houses nearby, such as the cameras on Montrose road that are located on a bridge at the bottom of a long hill.

Maryland speed trap

Darnestown, Maryland speed trap

The requirements that money be spent on “public safety” were proven meaningless when Chevy Chase village decided that purchasing a new Segway, a locker room, and an office for their police chief constituted “public safety improvements”. Minutes from Chevy Chase village show those items were purchased directly from the safe speed fund.

Finally, promises that they would not be used as cash cows were proven empty when in December 2008 new cameras in Darnestown were placed immediately after the location where the speed limit dropped from 40mph to 30mph. That setup is highly likely to snare any driver who does not react immediately to the changing speed limit.

The Maryland General Assembly is currently in session. Several legislators and Governor O’Malley have pledged to pass legislation which will expand speed cameras to other parts of Maryland. Given the deception Maryland drivers have faced already, it is urgent that you get involved to let them know you will not tolerate more scams, or more scameras!


Fairfax City Proposes Illegal Contract with Australian Company

January 9, 2009

On January 13, the Fairfax city council will adopt a contract with Redflex Traffic Systems to install deadly red light cameras at ten intersections in Fairfax, Virginia. How does this work?

Redflex, a company based in Melbourne, Australia, promises to pay the city of Fairfax for the privilege of installing the cameras, reviewing the photographs, creating public relations material promoting the system (i.e. propaganda), repairing any damage, preparing all materials for court hearings, mailing citations and collecting fine payments. It’s all spelled out in Appendix B of the contract (warning: PDF) You might be wondering, if Redflex is doing so much then what role does the city have? The answer is: none. In fact, Fairfax doesn’t even need to go down to the bank and cash its giant monthly check.

Redflex will deposit all of the ticket revenue in the city’s bank account — minus a monthly fee of $4,740 per intersection or a grand total of $568,800  per year. In fact, Redflex guarantees that the city will not, under any circumstances, lose any money on the deal, even if no tickets are ever issued. This so-called “cost neutrality” provision, spelled out in Appendix D, also happens to be illegal.

The contract says:

Cost Neutrality
Cost neutrality is assured to Customer — Customer will never be required to pay Redflex more than actual cash received by Redflex, and such cost neutrality should be reconciled on a monthly basis. This is a material provision of this Agreement and a condition precedent for Customer agreeing to enter into this Agreement.

In other words, despite all the wonderful benefits promised, the city has no interest in paying for its “safety” program. The most important provision in the entire document, the “condition precedent,” is that the city of Fairfax make a profit. We’ll let the reader decide whether that’s a shady motivation or not. Let’s look instead at what the Code of Virginia has to say about it.

A private entity may enter into an agreement with a locality to be compensated for providing the traffic light signal violation monitoring system or equipment, and all related support services, to include consulting, operations and administration….  No locality shall enter into an agreement for compensation based on the number of violations or monetary penalties imposed.

So, let’s think about this. Redflex must be able to keep $4,740 per intersection per month from the cash it collects from motorists. That’s roughly a total of 95 paid tickets. What happens if only half that amount, say 45 tickets, are actually paid? That would mean that Redflex would collect $2,250, but Fairfax would not be required to make up the difference because the contract says: “Customer will never be required to pay Redflex more than actual cash received by Redflex.”

That means if Redflex collects $2,250 in monetary payments, the company — a private entity — will be compensated $2,250. If Redflex collects on one more ticket to $2,300, then Redflex will be compensated $2,300. And so on up to $4,740. There is no getting around the fact that this would be compensation according to the number of violations and the amount of monetary penalties imposed.

An appellate court in California has already considered this issue and struck down a similar contract between the city of Fullerton and a different firm, Nestor Traffic Systems (NTS). The judge ruled:

The possibility that fees could be negotiated ‘down’ if it is determined fees paid to NTS exceed ‘net program revenues being realized,’ indirectly ties fees to NTS to the amount of revenue generated from the program. If insufficient revenue is generated to cover the monthly fee, the fee could be ‘negotiated down.’ As such, NTS has an incentive to ensure sufficient revenues are generated to cover the monthly fee.

So, not only is what Fairfax City proposes to do dangerous, it’s also illegal.