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.

Letter of the law

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."