Red light cameras not creating expected revenue

One reason for Oak Lawn's recently announced budget cuts is that its red light cameras haven't brought in nearly as much revenue as expected.

The village hired the Redflex Group, an Arizona-based company, to install automated technology designed to catch red light runners at two intersections: 97th Street and Southwest Highway and 95th Street and Cicero Avenue.

Oak Lawn officials expected to receive $600,000 from the cameras last year, based on the company's representations and their own judgment. But in the six months since they were installed, the cameras have brought in just $80,000. Finance Director Brian Hanigan said he's expecting them to generate $120,000 this year, as more and more people take care not to get slapped with the $100 fine.

"Poeple adjust their driving," he said. "I don't believe it's ever going to be $600,000 a year ... That's one of the items that's why we have a budget deficit."

SAN BERNARDINO - A Rhode Island-based traffic surveillance firm looking to more than double its operations in the city is in the midst of rocky financial times, federal records show.

Nestor Traffic Systems Inc., a unit of Providence, R.I.-based Nestor Inc. that has contracts with dozens of cities, including Montclair, has been beset by operating losses and debt in recent years and might be in danger of dropping off the Nasdaq stock market.

The City Council is expected to consider a recommendation from Police Chief Michael Billdt on April 21 to expand its contract with the company by more than $4.5 million through 2010. The contract would increase the company's coverage in the city from four intersections to 11.

News of Nestor's financial challenges might raise community and council opposition ahead of today's vote.

"This strengthens my position," said 4th Ward Councilman Neil Derry, who opposes expanding red-light cameras. "It's another reason to question the installation of this equipment with this vendor. The practice is questionable. Now, so is the vendor."

The contract stipulates that all of the money paid to Nestor would come from fines paid by ticketed motorists spotted by Nestor's cameras.

Corporate officials last week admitted to the recent struggles but said new leadership and renewed focus on core businesses will keep the company viable.

But as of a Dec. 31 filing with the Securities and Exchange Commission,
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the outlook was significantly more grim.

The report shows combined losses of $33.8 million over the past five years. Its largest annual loss during the period was last year's $8 million.

The company also divulged that it carried a "highly leveraged" debt load of about $27.2 million, which limits its ability to "meet competitive pressures and withstand adverse economic conditions," according to the company's annual report filed with the SEC.