Scottsdale company enjoys the benefits of traffic photo enforcement boom

Jim Tuton looks at the hundreds of thousands of road and street intersections in the United States, and he knows the time has come for his business. Ten years ago there were probably five red-light cameras in the country and today there are 1,500, the chief executive of Scottsdalebased American Traffic Solutions said.

By next year, he thinks there will be 3,000.

Ultimately, there are 350,000 signalized intersections in the United States. Tuton figures maybe 100,000 or so are candidates for photo enforcement. And each of those have up to four approaches to the intersection.

“The first thing you do is put redlight cameras in and, at some point, you can turn them on and covert them into speed enforcement and speed monitoring cameras and then later do midblock or mobile speed,” he said.

Tuton, a pioneer in traffic photo enforcement who put speed and red-light cameras in Paradise Valley in 1987, got out of the business in 1999 because it was difficult to make money. In 2003, he came back with a vengeance. The industry, he says, is doubling every three months.

Cities and towns across the country are under budget constraints, making the business of photo enforcement lucrative. Residents want more services with less taxes, Tuton said.

“They can either raise taxes now or reduce services,” he says of mayors and city councils. “Policing is a very expensive proposition and redlight running is a mission critical problem for police departments. A given city may have hundreds or thousands of signals and you can’t put officers at all of them. To modify people’s behavior, you have to increase the perception of enforcement, which means visibility, which means police officers. Phoenix would have to spend millions of dollars a year to get the same result as a handful of red-light cameras.”

Tuton said the cameras get results, pay for themselves and are popular with residents. He says public opinion polls across the United States put their approval rating in the high-70s to mid-80s. Photo radar generates revenue that pays for its use and additional revenue to offset other costs, he says.

So his business is booming. Not only did ATS recently get Mesa’s red light program up and running, but the firm has been winning business across the county in cities like New York, Philadelphia, Washington D.C., Houston and Seattle. States such as Missouri, Michigan, Florida, Tennessee and Washington are also ATS clients. Even Calgary, Alberta, Canada has given the company a contract.

Tuton says ATS, which has operations in Mesa, has 70 percent of the market.

“We focus on big and small cities,” he says. “In the last 18 months or so, we’ve added about 35 new customers from the state of Washington all the way down to Orlando, Fla. We’ve done extremely well. We have a great technology. It’s all new, it’s all fresh, leading edge.”

But not everyone is a fan of the idea. Sen. Dean Martin, R-Phoenix, sponsored bills this year opposing photo enforcement on Loop 101.

He says the business is booming because both cities and the companies offering the service have financial incentives to add the cameras.

“In everything that I’ve seen they’re really more like government ATM machines,” Martin said. “They have become a a great way for the private company and the local government to generate revenue. In every case, once one of those installations goes in, they very rarely ever go away, which is indicative they’re still generating revenue. If they’re generating revenue, that means they haven’t changed behavior. This is an industry that if it was fully successful would put itself out of business because it would stop the behavior they’re ticketing for.”

Martin opposed the freeway speed cameras because cities wanted to install them outside their boundaries and there is no independent testing of them.

“If you were to open up 100 cash registers with scales attached to them, every one of those scales would have to be tested,” he said. “You open up 100 photo radar locations, none of those are tested.”

Mesa, which has had photo enforcement since 1996, was so pleased with the reduction of serious injuries at the 13 intersections monitored by red-light cameras, the city approved a major expansion of the automatic enforcement operation.

American Traffic Solutions won the bid.

The 30 new red-light cameras — five of them capable of detecting speeders, as well — came with four photo enforcement vans. Mesa Police turned them on only a couple of months ago, so it’s difficult to say how well they work, said Mesa police spokesman Sgt. Chuck Trapani.

But Trapani likes the state-of-the-art technology that allows scofflaws to view their mugs online. “It’s better equipment than we had before — all digital,” he said.

Overall, Trapani is sold on the cameras as a boon to public safety by changing driver behavior.

“It’s not a money-making operation but it’s working so well in decreasing collisions and serious injuries,” he said.

Tuton pulled out of most of the photo enforcement business before the millennium because the technology was expensive. Digital technology has come a long way in the past 5 years, he said. At the time, he sold the technology to Scottsdale-based Redflex Traffic Systems, which has the Loop 101 contract.

“The technology was working, getting results, slowing people down and reducing the number and severity of crashes,” he says. “From a business perspective, for a number of reasons, the private sector wasn’t able to cover its costs and make a profit.”

From 1998 to 2003, Tuton said there were a number of “fly-by-night” undercapitalized firms that got in on traffic enforcement. They offered cities cut-rate prices and officials took the bait. Most of them underestimated costs and either folded or consolidated. There are less than a handful of companies in the business today, he said.

Since reentering the market, ATS has had to adapt much like computer companies went from bulky machines to laptops. The older cameras required tall poles and large roadside cabinets to house computer equipment, Tuton said. Today, cities and towns are focused on beautification and they don’t want a lot of clutter on the side on the road, he said.

“We took all of the technology that typically fit into a roadside cabinet you could literally put a human being into and shrunk all that down into something that size of a Pop-Tart,” he said. “We have a 16-layer board now that has all the of the technology to drive all aspects of the camera and the whole system can fit into something the size of a shoe box.”

ATS is a private company. According to Hoovers, it has estimated annual sales of $3.2 million. It employs about 100. Its headquarters are in the Scottsdale Airpark and it has other facilities in Houston, Seattle, New York and Philadelphia. Two months ago it moved into a building at Main Street and Robson in downtown Mesa. About 30 employees there put cameras together and ship them. There is also a call center for customer support.

“We have strong revenues,” said Tuton, who studied liberal arts at Vassar College. “Most of our contracts are 10 years so our backlog is in the hundreds of millions of dollars in terms of revenue over the next 10 years.”

He became interested in traffic enforcement because he knew the public safety field is recession-proof. “We are interested in social benefits,” he says.

“We’re doing something where we’re able to make money, hire people and deliver an outcome that at some point, we’ll be able to look back at how many lives we’ve saved and how much money we’ve saved cities and towns across the country, as well.”