Red-light fines benefit vendor

City forgoes profit to lower risk of camera deal

Wednesday, March 08, 2006

Jodi Andes

THE COLUMBUS DISPATCH

City officials have long said that putting cameras at red lights is not about the money.

Good thing.

The camera vendor says the city should expect to make less than $300,000 per year.

When Redflex submitted its proposal to the city last year, the city’s projected take was much higher: $4.5 million. That’s about 15 times more than what the city now stands to make.

If the cameras catch you running a red light, you still will have to pay a $95 ticket. The number of cameras the city plans to use is down a bit, from 20 to 17.

But the biggest difference is Redflex’s take.

Instead of collecting about 21 percent of the proceeds as their proposal pitched, Redflex will start out by pocketing 75 percent of every fine collected.

Columbus officials opted for a plan that guarantees the city a smaller share of the fines but yields less risk, said Redflex Vice President Aaron Rosenberg.

Under the company’s original proposal, the city would have paid $5,170 per camera each month. To make enough money to cover that expense, each camera would have to bring in fines from about two tickets per day. Redflex’s proposal said a conservative estimate would be 12 tickets per day, adding up to $4.5 million in revenues every year.

By getting rid of the upfront cost and agreeing to pay Redflex up to 75 percent of each ticket, Columbus removed any chance that it would have to pay for the system, Rosenberg said.

"There’s no magic behind the numbers," he said. But, he added, Redflex officials advise that the figures are "for demonstrative purposes."

"We advise cities not to budget based on those."

Columbus didn’t.

City Auditor Hugh J. Dorrian said he agreed that the city should go with the safest route possible.

"I would not want to see the city take a risk when we don’t know what (the cameras) will generate," he said.

The city’s 2006 budget didn’t include any revenue from the cameras, Assistant Safety Director Barb Seckler said.

"We don’t care how much revenue this brings in because you can’t put a price on safety," Seckler said.

It’s a classic bait and switch, said Ohio Rep. Jim Raussen, a Springdale Republican who proposed a bill that would make it impossible for cities to use the cameras.

"They use big numbers. . . . It makes for big public relations that gets people to use the program," Raussen said after learning of the changed revenue projection.

Former Deputy Safety Director Gary Holland said he wouldn’t be surprised if the city’s take is about $300,000.

"We thought it was going to be substantially less than what they proposed," said Holland, who worked on the contract before taking a job leading Franklin County’s emergency management office. "We felt realistically it would generate $500,000 to $750,000, based on 20 cameras."

Still, Redflex’s original proposal promised to shield the city from any costs.

"If the City should decide to pursue this model, Redflex will contractual (sic) guarantee the City can never operate at a loss," the proposal stated. "If annually the City recoups less then the program collects, Redflex will reimburse the City."

However, Rosenberg said, that actually means that the company would roll over any money the city owes month-to-month to be paid off by future revenues.

"We know that eventually the model will catch up," Rosenberg said, explaining the guarantee.

Cities, though, could conceivably end up owing money for the cameras.

Most cities take the option Columbus took, Rosenberg said.

Columbus’ contract stipulates that Redflex gets 75 percent of each ticket for the first 1,000 tickets or 65 percent if more than 1,000 are issued.

How Columbus could go from revenue estimates of $4.5 million to less than $300,000 is mind-boggling, some say.

"Given those numbers, the (Mayor Michael B.) Coleman administration is getting a worse deal on its red-light cameras than it got on the Short North arches," said Franklin County Republican Party Chairman Brad Sinnott.

The new estimates are based on the number of tickets Dayton and Toledo collected with their red-light cameras, said Joe Moore, Redflex’s Ohio representative.

Columbus could see more, he said.

The first two cameras in Columbus went into action yesterday at two intersections: N. 4 th Street at Mount Vernon Avenue and Nationwide Boulevard, and 4 th Street at E. 5 th Avenue.

During about a half-hour while city officials were announcing the program to reporters, Moore said, cameras captured four people who ran red lights.

In less than five hours, the camera at 4 th and Nationwide caught an additional 17 motorists running red lights, said Deputy Safety Director George Speaks.

Anyone who gets caught by the cameras will receive warnings until April 6.

Then, Columbus police will authorize Redflex to issue tickets.

jandes@dispatch.com