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If you haven't already done so, please read Defect # 10-B on the Home page

Cost Neutrality - How They Conceal It

The wording and organization of most RedFlex contracts is pretty much the same, with everything in the same place - except when it comes to the cost neutrality clauses, which are worded in many different ways, and often move around.  Cities having cost neutrality must feel guilty about it (legal term:  mens rea), because they sure go to some lengths to disguise it and/or hide it.

Hiding It

The most common, and most logical, location for cost neutral clauses has been in Exhibit "D," where a contract will prominently say "fixed price" - often multiple times - then will say:

"Cost neutrality is guaranteed to the city."

However, some contracts locate the clause in a section of the main body of the contract.  Examples:  Commerce and Modesto in 6.4, Glendale in 8.2 of its now-expired 2007 contract, Emeryville and Inglewood in 11.14.
(Modesto's contract now mentions cost neutrality twice - once in 6.4 of the 2004 contract, and again in Exh. D of the 2009 amendment.)

Disguised by the Wording

Instead of saying "cost neutrality,"some contracts call for a quarterly or annual review, or an audit, followed by a mandatory price adjustment if revenue is not covering the rent (examples:  Culver City until 2009, Encinitas until 2009, Santa Ana).

Some wording is mysterious, such as the "fixed price not to exceed" terms found, but not defined, in the Elk Grove contract.

A recent clever wording is "financial feasibility" (examples:  Gardena, Montebello, Oceanside, Redlands, San Leandro, Santa Clarita).

The newest clever wording is "financial insolvency," found in Exhibit D of the 2011 contract of the City of Rancho Cordova.

Sometimes It's Both Hidden and Disguised by the Wording

From 2004 Encinitas contract with

From the "boilerplate" of the 2004 Contract between Encinitas and RedFlex - removed by 2009 Amendment

You Should Check has not checked all contracts in California for hidden and cleverly worded cost neutral clauses.  If you have a ticket, you should check the contract in the town that issued it.  Most cities' contracts are posted here on, or you can obtain the latest contract and amendment(s) by phoning or emailing the city clerk, at City Hall.  Most city clerks will email it to you, for free.