Take the Deal and Run (But not Through the Red Lights)

American Traffic Solutions (ATS), the vendor company for Houston’s red light cameras offered a last-minute settlement.  They suggested that they will not pursue damages against the city for the eight months the red light cameras were turned off as long as the city keeps the lights on through 2013 (5 months before its original May 2014 expiration). 
 
Houston City Council is set to consider a resolution to turn off the cameras.  Council Member Sue Lovell tagged this item last week, pushing back their vote.  If they shut off the cameras now, it will probably cost them $25 million in damages.
 
Council Member Al Hoang said that as “a city, we cannot let a company bully us” (see here).  I agree, but I’m not sure this meets the definition of bullying.  Contracts are signed so both the proprietor and those doing business with them know the terms and the end date.  What is the point of having a contract if both parties don’t stick to it?  ATS probably hired people (although out of state – but still) to manage this contract.  They planned on a certain amount of money through 2014 to pay their employees, and they expect to receive what was signed in the contract.  So really this is the fault of the city.  As I’ve said before, they should have put in a clause about ending the contract if there is a change in the Charter that would warrant the terms to come to a close.  They didn’t, and now we have to pay for their mistake one way or another. 
 
We voted against the cameras, and the city needs to uphold this vote by shutting them off; however, I think in this situation, being as volatile as it is, the city should take this deal with ATS.  No, it’s not a perfect solution, but either way Houstonians get the short end of the stick.  Right now there is no scenario where we shut off the cameras and pay no money, and I don’t see that option ever taking place.  We have two scenarios on the table.  Senario 1: We shut the cameras off now and pay $25 million dollars that we don’t have.  Scenario 2: Take the ATS deal and not owe money.  My caveat to scenario 2 is that they better pass an ordinance now that bans red light cameras after 2013 and then work with voters to pass another Charter amendment in the next election that will ban them permanently starting in 2014.

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