9/28/2008Revenue Central to Discussion Over Red Light Camera Installation
Audio tape of red light camera installation in Homestead, Florida shows that revenue is a primary concern.
In public discussions, revenue aspects of red light camera installation is always downplayed or ignored. In Homestead, Florida, two companies -- Australia's Redflex and Arizona's American Traffic Solutions (ATS) fought for the right to issue tickets on behalf of the city. The winning vendor, ATS, made an hour-long presentation at an August 7 meeting with Homestead officials. The following transcript is excerpted from that presentation.
(Listen to audio excerpt, 7 minutes, in 3mb MP3 format)
GREG PARKS: I'm going to go ahead and jump in. I'm Greg Parks, I'm in charge of the eastern half of the country for ATS. It's a pleasure to be here. We've been working in some fashion with the city for about a year-and-a-half presenting to the commission on the idea of red light cameras in general. So we're in it for the long haul. I know we have only twenty minutes so I'll cut a lot of it out.
Most importantly, why today, why we're here, why us. The things that are unique that we bring to the table: We're the only US company in this space. We think that's a big deal. We've heard it around the country as citizens get citations. Nobody likes to get a citation to begin with, but they do prefer the money to stay with an American company if possible. We think that's important.
New vendors will want to come to the state, we understand that, it's a lucrative state, it's an important state for everybody in this business.
We're the largest provider in this space by a couple of metrics that we think are most important. We process more incidents per month than all competitors combined. Actually one of our very worthy competitors that you'll hear from tomorrow has a few more contracts in place but our contracts are much larger and we handle much more volume than anyone in this business, and that brings us scale.
Easier to use for police review: I know from Captain Strong and his team. You don't want to devote a lot of time to this. You want to be efficient, you want to get a lot out of it. You want to get in and get out. I'll show you want the screen looks like.
We're the only vendor that's investing a significant amount of time and money in Tallahassee, working to enable state legislation. I know that's important to your mayor and commission, and city management and staff. we've been doing this three years, and we're the only vendor making any consistent effort in Tallahassee to do this.
You want to look at this as a multi-pronged approach. You're doing it for public safety. There is a revenue aspect, and we're going to talk to that. But public safety is the main benefit.
Blocked escrowed account at the fourth biggest bank in the country. All of the funds go in there and once a week we sweep 100 percent of it into your primary bank account.
The revenue. This is purely an estimate. Until you do a study nobody can really accurately guess. We went with a 5, 10 and 15. You're probably going to be somewhere in the middle I would guess, at an 80 percent pay rate and at our fixed speed. We also have a variable speed that we can talk about. This is a ballpark based on our experience. Again, you won't really know, nobody can accurately predict that until you do a study.
We're going to bring the most revenue in, also an improvement in safety, and this is really where the rubber hits the road I guess.
That's probably your best value. I know you're not going there, but you're going to have a pretty high violation number to start... There is violation attrition. You want to keep in mind these are going to go down over time. I'm answering a lot more than you asked. If you do go that fixed fee, we will guarantee revenue neutral. This thing just kicks right in. If there are no violations, you can't have negative cash flow on it. But, yeah, $4750 will cover it. Definitively yes.
You want to get these up and running quickly, I'm sure, for a ton of reasons: from public perception to safety and revenue to everything in between.
COMMITTEE MEMBER: What is the criteria as far as volume before an intersection will be accepted? Say, I want this intersection, but when you do your study -- what is the criteria? Without getting into your trade secret or anything.
GREG PARKS: No trade secret. We've been talking for over a year on this. What we'd like if you go with us is the contract usually aren't executed without the intersections being agreed upon, or you do it vice versa. We'll do what's called a VIMS test like we did in St. Louis. So we'll come put them up. You've probably got the ten picked out you want to test. We'll test them all and come back with a real nice report. We'll tell you how many lefts, straights and rights for a time period. In direct answer to your question, what we like -- it's a mutual decision, it's not set in stone -- we like ten in a day. In Florida, that's not very many. We've got some places doing ten an hour. Per approach. We like ten, but it's not a hard fast set in stone rule. What we like about that is you want there to be a problem there to mitigate. These cost us about $100,000 a piece per approach. So we want to know there's going to be some revenue coming in to amortize our investment over time. But it's a qualitative thing. If there's been a couple fatalities there, if it's in front of a school, if it's in front of a commissioners house, we will work with you. This is not a lot of salesman mumbo jumbo.... if you want a camera somewhere, we'll put it there, we'll work with you.
Our highest grossing camera is in Fort Richey, Florida right now. We have New York, Philadelphia, Seattle.
COMMITTEE MEMBER: ...would it reduce the cost of the service, if the law were to change and you were able to?
GREG PARKS: It wouldn't decrease your cost, but it would because you'd capture more violations. Just to be very candid with you, full disclosure. That optical sensor works very well on the straights because it's grabbing the pixels. And you have some left arrows. We'll get them, but there are less pixels. So you're going to make a lot more money -- catch a lot more violations and improve public safety. Everybody will benefit if and when. You know the counties have a procurement coming out. Miami's got a procurement coming out. Once everyone's doing this, I think it'll be easier to say, "let's work with this."
COMMITTEE MEMBER: Yeah 'cause eventually they're going to want to standardize. Everybody's going to have to go by the same rules.