Millions in red light camera ticket revenue is in jeopardy following a ruling by the Appellate Division of the California Superior Court in Orange County. At least forty cities across the state depend on so-called "cost neutrality" clauses in their contracts with the private companies that operate red light camera programs. These provisions are designed to sidestep a state law prohibiting compensation payments to the companies based on the number of tickets issued. The appellate court last month dismissed the ticket of a Fullerton woman because the city issued a ticket under such a cost neutrality arrangement.

"The purpose of the statute is to avoid an incentive to the camera operator, as a neutral evaluator of evidence, to increase the number of citations issued and paid through the use of the equipment," Presiding Judge Robert J. Moss wrote.

Fullerton hired Nestor Traffic Systems (NTS) in January 2007 to operate the city's lucrative traffic safety program. As part of Fullerton's agreement with the firm, Nestor would perform an annual assessment of the flat-rate annual fee paid for the company's ticketing services.

"[Nestor] agrees to renegotiate its service fees (down or up, but not to exceed the service fees in Section 4.1) if it is determined that fees paid to NTS exceed net program revenues being realized," the Fullerton photo ticketing contract states.

In 2001, a San Diego, California Superior Court ruling found the common practice of having a city pay a financial bounty for each red light camera ticket issued had undermined the integrity of the system. In response, the state legislature mandated that all photo enforcement contracts signed after January 2004 must be flat rate. That means any payment method, "based on the number of citations generated, or as a percentage of the revenue generated" is prohibited. Judge Moss did not believe Fullerton's contract followed either the letter or the spirit of the law.

"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," Moss explained. "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."

The ruling is thought to be the first of its kind on the subject. An appeals court ruling earlier this year passed over the topic in a decision that bolstered the photo ticketing program. The Moss ruling sets a precedent that a photo ticket issued under an illegal contract is inadmissible as evidence.

"Because the city's contract with Nestor Traffic Systems violated Vehicle Code section 21455.5(g), the trial court erred in admitting evidence from the automated enforcement system," Judge Moss concluded. "The judgment of the trial court is reversed with instructions to dismiss the citation."

Highwayrobbery.net has examined the contracts of several photo enforcement programs across California and determined that the following cities used similar cost neutrality clauses: Baldwin Park, Bell Gardens, Capitola, Cathedral City, Citrus Heights, Corona, Covina, Culver City, Daly City, Davis, Escondido, Gardena, Glendale, Grand Terrace, Highland, Laguna Woods, Lancaster, Loma Linda, Los Alamitos, MRCA, MTA/Metro, Marysville, Menlo Park, Millbrae, Modesto, Moreno Valley, Murrieta, Napa, Newark, Oroville, Rancho Cucamonga, Redding, Redwood City, Riverside, Rocklin, Roseville, San Bernardino, San Juan Capistrano, San Leandro, San Mateo, San Rafael, Santa Maria, City of South San Francisco, Union City, Ventura, Victorville, Walnut, Yucaipa and Yuba City.

The full text of the ruling is available in a 75k PDF file at the source link below.