Illinois fire districts open up to commercial fire monitoring

New ordinances allow commercial customers to choose any fire alarm monitoring, but one company may have ‘tremendous market advantage’
 - 
Monday, October 21, 2013

ARLINGTON HEIGHTS, Ill.—After an appeals court ruling this summer saying public fire districts can’t monopolize fire alarm monitoring, two fire districts recently passed new ordinances allowing commercial fire alarm companies to compete in those markets.

While Illinois Electronic Security Association executive director Kevin Lehan called the passage of the ordinances by the Pleasantview Fire Protection District and the Darien-Woodridge Fire Protection District “a great development for the industry,” he tempered that remark with concerns about a separate decision the districts made when they approved the ordinances, which may have created yet another hurdle to competition.

That decision was to sell the already-installed radio alarm monitoring equipment the districts owned to just one alarm company vendor instead of going through a competitive bid process that would have allowed other alarm companies to bid on the equipment, Lehan said.

The districts sold the equipment to Chicago Metropolitan Fire Prevention Co. of Elmhurst, Ill., the alarm vendor that previously worked with the districts to help them put their fire alarm monitoring networks in place.

The equipment—hundreds of radios and head-end equipment—is already on the walls of the commercial customers that were previously mandated to contract with the public fire districts for fire alarm monitoring. As a result, Chicago Metro has “a tremendous market advantage,” Lehan contends.

Although the new ordinances allow commercial customers to freely choose any company they want for fire alarm monitoring, it could be easier for them to the choose the company whose equipment is already on their walls. Other vendors who want to sell to those same customers would have to remove the existing radios and install new ones while trying to remain competitive pricewise, he said.

Lehan said taxpayers may have lost out too because the districts might have received more money if the equipment were put out to bid. He said the legality of the districts selling to just one vendor is being investigated.

However, Bob Morris, a fire inspector for the Darien-Woodridge fire district, told SSN that there is competition in the market despite the decision to sell the monitoring equipment to Chicago Metro.

Morris said that since the ordinance was passed Sept. 18, some commercial businesses have switched to other fire alarm companies even though the district sold 250 radios to Chicago Metro. “We’ve had a number that have switched from the radios on site to another company already,” he told SSN on Oct. 11.

Morris didn’t know specifically how many businesses have switched. “I just know of a few, but it hasn’t been that long. … I don’t know what the numbers will be at the end of the day,” he said.

The ordinances by the Pleasantview and Darien-Woodridge fire districts are the latest development resulting from a long-running lawsuit filed after the Lisle-Woodridge Fire District adopted an ordinance in 2009 putting itself solely in charge of fire monitoring in the district.

ADT and four other Illinois alarm companies filed the lawsuit in 2010 in federal court after the fire district invalidated contracts the companies had with commercial and multi-residential customers. The fire district required those customers to contract only with the district for fire alarm monitoring via a wireless radio network implemented by a private vendor, Chicago Metro, with whom the district had contracted. Chicago Metro also was named as a defendant in the lawsuit.

The lawsuit is still pending but significant rulings in the case have favored the alarm companies. Although the lawsuit targets one specific fire district, it carries implications for others throughout the state.

Morris, of the Darien-Woodridge fire district, told SSN, “Because of [the] federal lawsuit, we changed our ordinance so people are not required to connect directly to the fire department. So they can go with any company they choose to and the company needs to transmit that signal to our dispatch agency.”

Lehan said, “I think it’s fantastic that there’s now open competition in many new markets. I just hope that the open markets aren’t tilted to any certain company due to relationships. You’d hate to see that for any type of government.”

Morris declined to say how much the fire district received for the 250 radios it sold to Chicago Metro, referring that question to Fire Chief David Lambright.

Ronald Broida, an attorney for the fire district, told SSN that Lambright had directed him to respond to SSN. Broida issued a statement saying: “In adopting that ordinance and taking other steps, the district has promptly complied with the requirements of the opinion of the Seventh Federal Circuit Court of Appeals and has acted in the best interests of the district and its constituents.”

Broida’s statement added, “The district will no longer be providing alarm monitoring services and declines to become involved in the ongoing controversies among private alarm companies.”

A spokesman for the Pleasantview fire district could not be reached for comment before deadline. Minutes from the Sept. 25 meeting at which the radios were sold said Chicago Metro paid $130,735 for them, but the minutes don’t specify how many of the district’s more than 450 radios were sold.