Albany’s Speed Cameras and the $10 Million mistake

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In July 2025 we reported on the fiscal side of Albany’s School Speed Camera program, noting that there is a significant gap between the projected and actual revenue for budget year 2025.  We outlined how school speed camera revenue would fall between $3.4 to $4.0 million short of budgeted revenue.   

Subsequently we analyzed the agreement that the City of Albany signed with Sensys Gatso, the school speed camera vendor.  We compared the City’s agreement against comparable agreements signed between other cities and Sensys Gatso.  These agreements were for speed camera systems, red light camera systems, or both.  We found a significant difference between the terms of the City of Albany’s agreement and those from other cities.  The City of Albany signed an agreement that is one of the most unfavorable agreements and potentially THE most unfavorable agreement of the lot.  

We further analyzed the cost of this agreement and identified that the City’s agreement with Sensys Gatso - relative to other cities’ agreements - will cost the City $10 million of unrealized revenue over a 5 year period.   

In this article we will walk through our findings and demonstrate that the City made a $10 million contractual mistake.  Note that we are not examining the safety outcomes of the speed camera program; we believe that the benefits of slower speeds on roads around our schools are real. 

In our previous article we reported that the School Speed Camera program would have a budgetary shortfall as noted above.  As an aside, the Q1 2025 Interim Financial Report produced by the Office of the Treasurer confirms the general trajectory of the shortfall:

Revenue in this category (Fines, Interest and Penalties) totaled $2.22 million, an increase of 114.5% from Q1 FY2024. The school speed zone camera program accounted for $791,000 of Q1 receipts. While this reflects continued rollout success, it remains well below the $6.4 million full-year budget, and revenue shortfalls are possible if enforcement volume or collections do not increase.

From our analysis we think the chance of a material revenue shortfall is nearly 100%.

In the process of writing the original article we did issue a Freedom of Information Request (FOIL) to the City for a copy of the signed agreement between the City and Sensys Gatso.  Reviewing the contract we had two concerns:

1. The City pays Sensys Gatso 66% of all collected revenue which is a percentage that we believed was too high
2. The City’s agreement is a 5 year agreement and we found no mechanism that would allow the City to cancel the agreement for whatever reason.  

Typically, the buyer-side of a technology agreement wants some way to buy themselves out of an agreement for any of a number of reasons, including when the buyer finds out their agreement is unfavorable.  This is a typical buyout clause found in an agreement between the Village of Homewood, IL and Sensys Gatso:

Our goal was to find out if either or both of these concerns - bad economics and lack of a termination clause - are valid. 

The best way to understand if your agreement is good or bad is to compare your agreement against similar agreements - what are the terms that other cities, towns and villages are contractually agreeing to?

Conveniently, Sensys Gatso publishes a customer list.  We took this list and issued Freedom of Information Requests (or similar open records requests) to almost every government on the list.  As of this writing we have received replies from over half of the governments on this list, receiving either copies of signed agreements or statements that no such agreement exists.   

We reviewed each received agreement and looked for two things:

1. What is the financial arrangement between Sensys Gatso and the local government?
2. Does the contract between Sensys Gatso and the local government have a cancellation clause?

A typical expression of the fee structure in an agreement looks like this, from St Marys, GA:

 In the table below we list out each city that we successfully FOILed with two data points - the financial terms of each agreement (what percentage of gross revenue goes to Sensys Gatso) and whether each agreement has a Termination by Customer for Convenience clause.  We have included Albany at the top for comparison. 

&& - Uses a different revenue model (a blend of a fixed, per camera fees and percentage of citation revenue) than the City of Albany, where we can’t reliably identify the % of gross revenue returned to Sensys Gatso 

** - Uses a different revenue model (a blend of a fixed, per camera fees and percentage of citation revenue) than the City of Albany, however we reviewed actual payment data to estimate the percentage of revenue that flows to Sensys Gatso

We also reviewed the terms of the City of Albany’s agreement with Sensys Gatso and compared those to the terms in other cities’ agreements.  We found terms across agreements were comparable and were not a basis for the City of Albany to pay significantly more fees.  Below is one example of comparable language outlining comparable responsibilities, with St Marys GA contractual language listed on top and the City of Albany’s contractual language on the bottom.

While we are still collecting additional contractual agreements via our FOIL requests (and will update the article and analysis with any meaningful changes) we have identified preliminary answers to our questions:

The City of Albany’s agreement returns 66% of gross revenue to Sensys Gatso.  What is the financial arrangement between Sensys Gatso and local governments based on our examinations of other agreements?

The arrangements typically have fees returned to Sensys Gatso of between 30-40%.

The City of Albany’s agreement does not allow the City to cancel the agreement at its convenience.  Do contracts between Sensys Gatso and local governments typically have cancellation clauses?

Over ¾ of agreements contain Cancellation for Convenience clauses.

There is a significant gap between the financial arrangement that the City of Albany has made with Sensys Gatos and the arrangements that other cities have made.  The City of Albany has a 5 year agreement with Sensys Gatos that does not contain a termination clause; this is the agreement that we have to live by for 5 years, unchanged.  

We want to answer the question “What does the City of Albany’s agreement cost the City in lost net revenue compared to an agreement that would have a more typical, 40% fee paid to Sensys Gatso?”

Our prior analysis suggests that Albany’s school speed camera program will, at best, generate $8 million in gross revenue for the contract year ending in 2025.  This best case will result in $2.72 million in net revenue, with $5.28 million going to Sensys Gatso in fees.

We also believe that gross revenue for the program will decline year-over-year as drivers align their behaviors with the speed cameras.  We are estimating a 2% year-over-year decline in gross revenue.

Using these data points we can compare the City’s net revenue based on the current agreement (the City keeps 34% of gross revenue) versus the City’s net revenue if we had more favorable terms typical of the agreements signed by other agreements.  For this analysis we will use a 60% net revenue figure.  

Given the assumptions, in the table below we show the projected year-by-year projected gross revenue (the total amount of paid citations).  This results in a 5 year gross revenue projection of over $38 million.  Below that we list two projections:

1. the projected net revenue that the City of Albany collects under the current agreement where the City retains 34% of gross revenue
2. the projected net revenue that the City of Albany would retain under a more favorable agreement where the City retains 60% of gross revenue

We estimate that the City of Albany will collect net revenue of $13 million over a 5 year period with the existing school speed camera agreement.  If the City of Albany had a fee structure generally equivalent to the terms of other cities, and all other factors were unchanged, the City would collect $23 million over a 5 year period.  

The result - the agreement that the City has signed will cost the City over $10 million when compared to the more favorable terms of agreements that other governments have signed with Sensys Gatso.

The City of Albany entered into an agreement in 2024 that expanded an existing agreement with Sensys Gatso.  The terms of the agreement are not favorable and will cost the City around $10 million over the agreement’s lifetime compared with a scenario with more favorable, typical terms.  Furthermore, there is no ability for the City to change the agreement; there are no contractual terms that would allow this, nor does the City have any leverage to force a change.

This $10 million mistake is on top of an estimated $3.4 to $4.0 million shortfall on 2025 budgeted revenue of $6 million.

We have posted the agreements between other cities, towns and villages and Sensys Gatso in a Google Drive folder for anyone who wants to review these agreements.  In the Google Drive folder you will also see that we have posted the City of Albany's agreements with Sensys Gatso.

https://drive.google.com/drive/folders/1UqrjoEM4KEwsiZwyiRjUhlM9do1Ujux-?usp=sharing

Comments, questions, criticisms?  Drop us a note at AlbanyDataStories@gmail.com.