The Economics of Home Monitoring

A number of things have changed in home security monitoring. With the police departments, the municipalities are further and further stretched budget-wise. There just isn’t enough money.

So they are looking to alarm monitoring as a revenue source not just for the police departments but for the cities as a whole.

Seattle is a case in point. In the city of Seattle today, if your alarm company calls the city, the response is not what you expect.

Say the alarm company calls the emergency dispatch to say “we have a burglar alarm at Joe smith’s residents, we show the back door open.” The first thing that the city does is they prepare a bill for $115. The next thing they do is they’ll call police dispatch. But the dispatch has been downgraded from a code 2 to a code 4 response.

Code 2 response is right underneath holdups and injury car accidents. Code 4 is if you have an opportunity stop by and check this out but you’re not required to if you don’t have time. Far from a high priority.

The result has been that police response has gone anywhere from what used to be 10 to 20 minutes, to now where we’ve had response times as long as 5 hours. Some have no responses at all.

The only thing that remains constant is the fact that you’re getting that bill for $115. They actually bill the alarm company and the alarm company passes it on to you, naturally.

In 2004, the city of Seattle had 32,000 false alarms or unnecessary police dispatches which they find $125 a piece. That comes to a revenue of between $3 and $4 million. The police department downgraded their response at a city council meeting. They told us that they had spent over $800,000 responding to alarms and it had cost the department $400,000.

To which I asked, it seemed to me that the false alarm fine revenue was between $3 and $4 million and I didn’t understand how it cost them $800,000 and they lost $400,000. To which the police chief said “well, we only get 10% of the revenue.”

My response is “where is the 90% going” and we were told it went to the general fund.

The city was making money for its budget on it, yet the police department was losing money. As a result they passed this and now the city gets virtually nothing because all the money is going to  private guard response. Problem with a private guard response is that it’s not very timely either. We’ve had generally somewhere between 45 minutes and one and a half hours.

So in the city of Seattle, what they do is they say you need to watch out for your neighbors if you see anything in the neighborhood that looks something. Give us a call and we’ll take a look at it.

There’s a funny thing that’s happened with the alarm monitoring companies, the big national companies like ADT and Brinks. (Well, Brinks is now ADT.) They keep charging more and more money and the implication is that what you’re paying for is police response.

But the police aren’t responding anymore, so how do you justify these $30, $40, $50, $60 a month charges for something that you’re not getting.

In the next section, we’re going to talk about what we see as the paradigm shift and how neighborhood based alternatives will help the home owner get back the protection that they once had.

Intro to Alarm Monitoring Series: