4/28/2010Florida Legislature Bails Out American Traffic Solutions, Goldman Sachs
Traffic camera firm gamble on running red light camera programs in Florida pays off with legislative approval.
The Florida legislature gave final approval yesterday to legislation giving municipal governments permission to operate red light cameras in return for a significant cut of the profit generated. The state Senate voted 30 to 7 to adopt a bill that had been approved last week by the House by a 77 to 33 vote. Passage of the measure represents a significant victory for American Traffic Solutions, a firm that installed and operated red light cameras in violation of state law on the gamble that the legislature would eventually authorize photo ticketing.
"There are a number of providers of traffic infraction detectors in Florida," the official House staff analysis explained. "These providers and others may realize a significant positive fiscal impact, depending on how each provider structures its services and negotiates with a given the county or municipality."
Goldman Sachs, which invested heavily in ATS two years ago, also benefits significantly from the bill. ATS competitor Redflex Traffic Systems of Australia, the largest provider of automated ticketing machines in the US, had opted not to operate in Florida after it had been burned by operating cameras without authorization in Minnesota only to be forced by the state supreme court and a federal judge to refund the ticket revenue.
In Florida, the staff analysis suggests that $160.5 million in annual revenue was foremost in the minds of legislators. The estimated haul would be divided with $94.8 million going to the state and $65.7 million to municipalities. Citing documents obtained from TheNewspaper, the legislature's analysis raised doubts about the safety rationale commonly asserted by the cameras' advocates.
"Other studies, including a 7-jurisdiction study conducted by the Virginia Department of Transportation and a US Department of Transportation-funded study by the Urban Transit Institute at North Carolina A and T University, have reached conflicting results regarding crash reduction," the staff analysis explained (view studies).
In recent years, the primary purpose of red light cameras has also evolved beyond penalizing vehicle owners who "run red lights." Instead, the vast majority of citations are mailed to those who fail to stop behind an arbitrary line before making a right-hand turn. According to federal data, such technical violations rarely cause accidents (view study). The new Florida legislation vaguely prohibits ticketing a right-hand turn made "in a careful and prudent manner," but it maintains the troublesome legal definition of a "violation" as failing to stop behind an arbitrary line on the pavement. Nationally, automated tickets are often issued to people who do stop before turning, but not at the line.
Unlike laws regulating cameras in other states, Florida does not require that law enforcement officers review the accuracy of the citations generated by the private firm. Instead, the bill allows meter maids or "infraction enforcement" non-uniformed employees, to sign off on tickets. The private vendor can wait up to thirty days before mailing the $158 tickets to the registered owner. Of this amount, the state keeps $113 for tickets issued on state roads and gives $45 to the local government. On local roads, the state takes $83 and the locality $75.
Governor Charlie Crist (R) has already indicated his intention of signing the bill into law. A copy of House Bill 325 is available in a 170k PDF file at the source link below.