Thursday, December 1, 2011

Speed Cameras Now a $77Million Industry in Maryland

The Maryland Comptroller's office has released data to in response to a Public Information Act request revealing that 13 municipalities reported speed camera revenue totaling $36million in the Fiscal Year from July, 2010-June30 2011.  Combined with other cities, counties, and the State of Maryland's program whose revenue data is available in open sources, this adds up to approximately $77million worth of speed camera revenue in one year, or the equivalent of approximately 1.9million citations.

When Statewide speed cameras were passed, a provision of the law  law includes a provision that
"(ii)    1.   For any fiscal year, if the balance remaining from the fines collected by a political subdivision as a result of violations enforced by speed monitoring systems, after the costs of implementing and administering the systems are recovered in accordance with subparagraph (i)1 of this paragraph, is greater than 10% of the total revenues of the political subdivision for the fiscal year, the political subdivision shall remit any funds that exceed 10% of the total revenues to the Comptroller."

All municipalities running speed camera programs were required to file an SMS-1 form with the comptroller's office reporting their total speed camera revenue, program expenses, total municipal budget, and remit a portion of their revenue if it exceeded 10% of their budget.  Only 10 jurisdictions reported by the deadline, with 3 more reporting within 6 weeks after the due date with the Comptroller's consent.  The data reported was as follows:

Several Municipalities running speed camera programs did not report by the due date, including Rockville, Gaithersburg, New Carrollton, Glenarden, District Heights, Capital Heights, Landover Hills, Chestertown, Seat Pleasant, and Frederick.  It is not obvious whether the volume of the tickets issued by any of these programs in FY11 would have been sufficient for them to have owed any revenue to the state under the provision, or whether they received permission for the delay in reporting.

Only 5 jurisdictions owed money under the '10% rule': Riverdale Park, College Park, Forest Heights, Chevy Chase, and Mount Rainier.  Baltimore had by far the largest haul among cities, but due to the size of their budget was nowhere near the provision.

When adding to this the value of citations issued by the State of Maryland, and revenue reported by several other jurisdictions in open sources, this adds up to a one year total of over $77million.
There was insufficient public information available for Glenarden, District Heights, Capital Heights, Landover Hills, Chestertown, Seat Pleasant, or Frederick to estimate their revenue totals so the total amount could be somewhat greater.

Most of the jurisdictions included the speed camera revenue (including the contractor's fee) as part of their 'total revenue' reported to the Comptroller and used that to compute the maximum 10% they were allowed to retain.  If the amount of revenue earned is modest this has only a small effect.  However in the case of Forest Heights and Chevy Chase the effect was huge:  Forest Height in particular had more revenue from speed camera than from all other sources, meaning that the 10% they were permitted to retain actually represented increasing their budget without speed camera revenue by 22.13%.  This way of measuring budget size also permitted the town of Brentwood from paying any revenue to the Comptroller under this rule.

In addition 'expenses' were not defined by the state law.  Chevy Chase in particular cited 72% of their speed camera revenue as an expense, largely because they had shifted regular police salaries into the 'expenses' of the safe speed budget, declaring over $360,000 worth of police salaries as expenses of the speed camera program. Forest Heights also appears to have a larger than normal portion of 'expenses', declaring expenses which are approximately $270,000.00 above their contractor's fee : an amount equal to about10% of their non-speed camera funded budget.  This means that all together Forest Heights used speed cameras to increase their budget by more than 30% beyond what it would have been without speed cameras.

Forest Heights apparently plans to retain a larger proportion of this revenue in FY2012, having included an undefined $4,492,524.00 "INTERGOVERMENT" fund as part of their FY2012 budget.  This means that their budget used to compute their "10%" in FY2012 is projected to be $7,768,726.00, compared to a budget of less than $2million prior to the town's adoption of speed cameras... more than tripling the size of their budget in 3 years.  The Comptroller was asked in our Public Information Act request for an opinion as to whether counting this type of fund for this purpose was legal, and stated that they were unable to provide one. 

In addition to the municipalities reporting, Rockville earned a projected $2.1million in revenue and Gaithersburg $2.4million.  New Carrollton did not file a report within the scheduled timeframe, but their FY12 budget document showed a projected $750,000 in speed camera revenue for FY11.  Baltimore County collected about $2.3million.  

Montgomery County's FY12 budget projected speed camera revenues in FY11 of $10,687,000 in citations, as well as $1,200,000 in late fees and $320,000 in flagging fees.  The $25 late fees imposed by most camera programs have the potential to increase revenues earned from the tickets.  In addition the contractors collect an additional fee of about $3 per ticket from drivers who pay through their online payment websites, adding to their bottom lines.

Total payments to the State of Maryland by municipalities were $2,241,385.00.  Of the 5 jurisdictions who reached the threshold under this provision, 4 of them were Optotraffic contractors.  The Optotraffic programs who reported brought in a total of $13million (and several others did not report), placing Optotraffic's cut of that revenue at over $5million.  ACS State and Local Solutions however remains the largest contractor, since they control the large contracts with Montgomery County, Baltimore City, Baltimore County, Rockville, Gaithersburg, Takoma Park, Chevy Chase, and the State of Maryland.

The only program to claim a loss was Cheverly, who reported expenses exceeding camera revenues.  Cheverly's contract with Optotraffic was recently broken off after they experienced numerous technical issues.  Documents released by Cheverly revealed that the Optotraffic cameras they had been using (the same type used by programs in College Park, Forest Heights, New Carrollton, Riverdale Park, Prince George's County, and several other jurisdictions) had produced speed measurement errors, a revelation which supports the assertions by some who claimed they received erroneous citation from Optotraffic Cameras in jurisdictions like Forest Heights, College Park, and Brentwood, where alleged errors have also been reported.  Cheverly had at one time predicted annual speed camera revenue of $2,808,500.00 in FY11 in an earlier version of their 5 year budget forecast.  But instead after several citizens complained about receiving erroneous tickets the town was forced to institute tighter procedures.  They eventually experienced new technical issues which forced them to stop approving citations and take cameras offline, and the revenue never materialized.  After the contractor was unable to resolve or adequately explain the problems, Optoraffic declared that Cheverly's speeding problem was 'solved', broke of the contract, and Cheverly signed a new contract with speed camera contractor Brekford corp who uses a different model of camera.  Cheverly then took the appropriate and courageous step of coming clean and released the telling documents revealing the issues they had experienced.  We will never know for sure how much if any of the revenue collected by the many other jurisdictions using these cameras might have come from innocent drivers, and their contractor denies any errors have ever occurred.

The State's own SafeZones program issued a total of 522,802 citations during the same July 2010-June 2011 time period, according to information on the SHA website.  These citations would have a net value of $20,912,080.00 if fully paid.  Some citations will go unpaid, however like Montgomery County they will also collect additional revenue from late and MVA flagging fees which will at least partially offset that.
The "10% rule" went into effect on October 1, 2009 when statewide speed cameras went into effect.  The attorney General had sent a letter of advice to Chevy Chase Village, stating the following:
"Thus, it is my view that, after costs of implementing and administering the system, any fund balance from fines remaining at the end of fiscal year 2010 (June 30, 2010) and each fiscal year thereafter that is in excess of 10% of the total revenues for a political subdivision, must be remitted to the comptroller for deposit to the general fund of the state.  It is further my view that any funds collected under a current speed monitoring system that are not spent or encumbered by the political subdivision by June 30, 2010 will be included in the balance remaining from the fines for the purpose of determining whether the balance is greater than 10% of the revenues of the political subdivision."

Despite this, the Comptroller reported that no money or information about speed camera revenues were collected from municipalities for FY2010 (July 1,2009-June30 2010), and was not able to provide a document explaining this apparent discrepancy.

Chevy Chase Village had a large amount of speed camera revenue prior to FY2010, as well as an approximately $3million dollar speed camera reserve fund which the AG's letter opined was also to be counted towards the total.  We asked the Comptroller's office to provide documentation for why no revenue information or payments were collected for the FY10 year and they were unable to provide any.  Several jurisdictions besides Chevy Chase had existing programs or started programs early in FY2010 which at least in theory could have reached the 10% budget threshold.

Under state law, municipalities and counties are only supposed to be spent on "public safety".  However the term is completely undefined under state law, and jurisdictions are permitted to supplant existing expenses previously paid for out of the general fund.  For all intents and purposes a jurisdiction can declare any amount of existing expenses .  We have previously documented how Chevy Chase Village has included items general operating expenses as well as items like copiers, Cable TV lines, and a Segway.  In their FY11 budget included additional items such as snow plows and sidewalk or road paving, on the grounds that there is some relationship to safety.