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Monday, May 21, 2012

Charlestown moves forward on red-light cameras, but under a caution light

Councilors still nervous the deal is too good to be true
Did their "preferred vendor" SenSys tell the whole truth?
By Will Collette

The May 14 Town Council meeting ended on the last of Council President Boss Tom Gentz’s record-setting string of unforced errors. He was about to adjourn the meeting when several other Council members pointed out that he forgotten about action on the two proposals the town received from vendors interested in setting up red light cameras at the town’s four intersections. See here and here for earlier articles on this topic.

However, the biggest unforced error may be the Town Council selecting one of the bidders, Sensys America, as its “preferred” choice based on a series of mistaken assumptions and possible misrepresentations by SenSys’s representative at the May 9 special Council meeting

The two bidders, Redflex and SenSys, are both major national players in the red-light camera market and both offered to set the town up with the camera systems at a cost of roughly $1 million a year, depending on how many camera systems actually get installed (maximum = 16)..

Gulp. That’s the bad news – very, very expensive deal. But, the good news is that both companies are willing to sign three-year contracts that cap Charlestown's financial obligation at the amount of traffic fine revenue the system generates. If the ticket revenue is less than the actual cost, no problem, no charge.

If the deal doesn’t work out after the contract expires, the companies can pull out the cameras, again at no cost to Charlestown.

Even though I am a huge fan of red-light cameras, I had expressed reservations about whether the vendors would need to set up their systems to write an excessive number of tickets to break even.

Both vendors satisfied those concerns by noting that they would have no control over the amount of time each traffic signal stays on each color – on Route 1, RIDOT controls that, not Charlestown and, in the future, not the vendors.

Sensys camera
Further, both companies will send the image of each violation to Charlestown Police for our local police to make the final call on whether or not to issue the ticket.

On a vote of 3 yes (Gentz, Deputy Dan Slattery and Gregg Avedisian), none opposed and two abstaining (Lisa DiBello and Marge Frank because they did not attend the special meeting with the vendors), the Council authorized acting Town Administrator Pat Anderson and Town Solicitor Peter Ruggiero to do some due diligence and carefully examine the proposed contracts.

The three yes-voting councilors wanted to make sure the vendors didn’t have secret lawsuits against their former clients. Deputy Dan was particularly concerned the vendors might have actually gone after clients whose red-light tickets didn’t meet expectations.

The councilors expressed a strong preference for SenSys, which for some reason, they all called “sensei,” (先生) as in the martial arts teacher rather than Sen-SIS. They felt Sensys had the edge because it is a local company (it isn’t) that understands Charlestown (it doesn’t) and has superior technology (a judgment call).

Personally, I think either technology would work out, but when I listened to both vendors do their presentations, I had some problems with Sensys.

First, the SenSys sales guy, Brian Haskell, couldn’t get his laptop sales presentation to work. He was reduced to doing shadow puppets for the Councilors instead of a Power Point (myself, I prefer shadow puppets). I'm joking about the shadow puppets, but it is a bad sign for a company trying to market its technological acumen to have problems with its sales pitch technology..

Second, he talked a lot about how he lived in West Warwick and his company wasn’t some big, uncaring stock-trading national company. His Power Point presentation (now tacked on to the end of the proposals on Clerkbase) calls SenSys "Rhode Island based."

The Councilors lapped that part up, noting their preference for SenSys was because they are a local company. They’re in for a surprise when they run “SenSys” through the RI Secretary of State corporate database and see that they are not registered to do business in Rhode Island.

The Westlaw database shows no records for SenSys in Rhode Island either. Sure, SenSys can easily get all its corporate registrations in order, but the Council members who think SenSys is a local company are  wrong.

While I don’t doubt Haskell lives in West Warwick, in fact, SenSys is a big international company. Miami (site of SenSys America headquarters) is in Florida, not Rhode Island, although some CCA members might not know the difference.

While SenSys is headquartered in Miami, it is incorporated in Delaware.

Haskell told the Town Council members that SenSys is “100% American.” That claim is also on the Power Point presentation that you can now see on Clerkbase. However, it is not true

SenSys America is simply a new company that was formed in 2010 to be the distributor for Sensys Traffic AB, a Swedish company. The resume of SenSys America's CEO, Carlos Lofstedt, is included in the proposal package sent to Charlestown. In his resume, Lofstedt notes that Sensys America is the "exclusive representative of SenSys Traffic AB." The actual technology is owned by the Swedish company. In the SenSys Traffic AB annual report, SenSys America is simply described as a "service provider (p. 7)." Further, the US is only a small part of SenSys Traffic AB's international market, accounting for only 8% of its world sales in 2011 (p. 21). 

I've got nothing against Sweden, Swedish technology, or Swedish business, but Haskell needs to explain just how "100% American" and "Rhode Island-based" his company really is, especially since this is why our Town Councilors say they "prefer" Sensys..

Haskell made a big point of noting that Sensys is a privately-held company, not traded on the stock market. I don’t know why this makes a difference to Charlestown, but I can understand why it makes a big difference to him. 

Haskell got his experience in red light cameras as one of the directors and executives of Nestor, Inc. which was an early red-light camera company based in Providence. From a financial point of view, Nestor was a basket case. Nestor did trade on the stock market and generally performed poorly. The big score for Nestor shareholders, and Haskell, came when SenSys bought Nestor.

In the proposal to the town, SenSys America makes Nestor sound like it was a great turn-around company and credited Haskell with that turn-around. In fact, Nestor was a shambles. The last document in the RI Secretary of State’s database file on Nestor is a June 3, 2009 receivership order

Haskell was listed as company vice-president when this happened. Apparently, there still is a lot of personal fall-out for Haskell coming out of Nestor’s tumult – Westlaw shows a federal IRS tax lien was placed on his home for $125,594 on April 26, 2011.

There are more troubling inconsistencies with Haskell. For example, he was not being totally honest when he said SenSys did not trade on the stock market. While Sensys America is not publicly traded, their European parent, Sensys Traffic – is traded on NASDAQ OMX.

Haskell claims on his Power Point presentation that SenSys has "Trained and Experienced LOCAL [his emphasis] engineers." However, there is only one engineer listed in the proposal and he is based in New York. The only Rhode Islander listed in the proposal is Haskell, and he is a lawyer and "business development" exec for SenSys, not an engineer. 

Haskell also didn’t have a clue about Charlestown. He had no clue about Colin Foote or why Charlestown is especially sensitive to red-light running. Gentz had to tell him the whole story about Colin Foote. Haskell also acted like he had no idea how Route 1 is set up in Charlestown and kept talking about how SenSys cameras could cover four lanes of traffic in each direction. Charlestown does not have, nor is ever likely to have, eight-lane stop-lighted streets.  .

I never realized how far away West Warwick is until I heard this guy’s presentation.

At least the RedFlex sales team had done their homework. They knew exactly who Colin Foote was and knew about the Colin Foote Law and a lot about Charlestown. They had done their homework. And they were clear about what they were and what they were not.

If we throw out Haskell's nonsense - especially the crucial claim that SenSys is Rhode Island based - and simply focus on the technology, there is one advantage SenSys has over RedFlex. Unlike RedFlex, Sensys cameras operate by radar, rather than road sensor, meaning that they won’t have to tear up the intersections to install the system. That’s a big plus.

And if we go with SenSys and something goes wrong, like Haskell said, he’s just up the road in West Warwick. Maybe he can get his GPS to work so he can find his way back here.