Despite persistent concerns over its performance, the company that operates Los Angeles' red-light camera program won preliminary approval Monday for a three-month contract extension.

The City Council Public Safety Committee reluctantly recommended extending the $3.1-million-a-year contract through June 30 after American Traffic Solutions Inc. agreed to forgo a disputed $736,000 payment.

Councilmen Dennis Zine and Greig Smith voiced concerns about the cost of the program. They noted it was originally designed to be revenue neutral, but actually costs the city upwards of $100,000 a month.

"We only get $137 out of the $450 ticket and we get nothing if people say they will do community service," Zine said. "And, more and more people are doing community service. I know we started this as an accident deferral program, but I'm not sure we can afford it."

Smith added, "At a time when we are laying off 4,000 workers and the Police Department has an $80 million shortfall, I'm not sure we can justify this."

American Traffic Solutions assumed the contract last year from Nestor Traffic Systems, which had declared bankruptcy.

The committee recommended the contract run through the end of the current fiscal year, and that it be reviewed during the council's deliberations for fiscal 2010-11. The full council still must vote on the contract extension.

The panel was told the council needs to decide whether it wants to continue the program, which currently operates at 32 intersections around the city.

The Los Angeles Police Commission is scheduled to take up a report today examining the effectiveness of the cameras.

In a report to the commission, the LAPD said the cameras have helped reduce collisions in each of the years since they have been installed and there have been no traffic fatalities at any of the intersections where the cameras are operating.