AUSTIN (KXAN) – The City of Austin’s ongoing contract with Redflex Traffic Systems Inc. will remain in place through 2018 despite an ongoing federal probe into the former CEO of the Arizona-based company in connection with a bribery scheme involving the City of Chicago, an Austin spokesperson confirms to KXAN.
“Allegations against former Redflex employees do not affect the company’s contract with the City of Austin,” spokesperson Alicia Dean said.
The response goes on to read the City has never had any issue with Redflex after first contracting with the company in 2008. KXAN is also waiting for a response on whether any Austin city staff are being investigated – possibly in connection with the conspiracy charge filed this month against Redflex’s former CEO Karen Finley. The federal indictment alleges she enriched a former City of Chicago city transportation official in exchange for helping secure the lucrative contract. The Chicago Tribune reports both have denied the allegations.
KXAN has also reached out to the Texas Attorney General and US Attorneys Offices. Typically, those higher level agencies do not reveal the status of any criminal investigation until formal charges are filed.
The ongoing FBI probe may have cost Redflex business. In April, the Chicago Tribune reported Orange County, Florida which takes in the Orlando area halted talks with the company due to the negative publicity. The newspaper reported other jurisdictions which were also reconsidering Red Light Cameras.
KXAN’s reporting in a bid to localize the Chicago scandal may have created a city council election campaign issue. This week, Place 5 candidate Jason Denny put out a release calling for a review of Austin’s Red Light Camera program and a suspension of all ticketing.
Denny said, “I want to make certain that the original contract the city entered into with Redflex was not the result of nefarious actions on the part of City staff or office holders,” adding there must be certainty the City has not been victimized.
If the City did halt ticketing and Redflex’s monthly payments stopped, it’s likely the company would sue. A few years ago when the City of Houston put its existing Red Light Camera program to a citizens’ vote, Redflex’s competitor filed breach of contract suit and won. The decision cost the Bayou City $5 million.
The Redflex website reports Redflex Traffic Systems partners with over 220 communities and operates over 2,000 traffic safety systems in the United States and Canada. It no longer shows a list of individual cities. Since the Austin program was put in place with ten cameras in 2008, KXAN’s analysis of records shows the City has collected $3.5 million dollars. Most of that has gone to pay Redflex. The City first contracted with Redflex, paying $560,000 a year on an expectation revenues would reach $1.3 million.
This year, City finance records show Municipal Court administrators paid Redflex $487,000. Last year, revenues were $617,666, records show. That meant for FY2013 after City Municipal Court administrative expenses, the City’s Traffic Safety Fund received about $65,000. The State was set to receive an equal amount for its regional trauma account under a 7 year-old law.
A brief to Council Members from 2007 shows the first contract stipulated the City would pay a flat monthly fee per intersection approach. A revenue neutrality plan guaranteed if the gross monthly revenue did not exceed the total monthly fees, the City would pay the lesser amount for that month. KXAN has also requested the original bid requests. Records show one other bidder, American Traffic Solutions, the same company that sued Houston taxpayers.