Monitoring America: All for one, one for all

Central station co-op going strong with formula of joint ownership and annual dividends
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Wednesday, March 13, 2013

TULSA, Okla.—For the alarm company owners who pooled their resources to form the Monitoring America cooperative in 1989, the premise was simple: A sum is greater than its parts, especially when it comes to getting personal service from a central station and a return on your investment.

It’s a formula that worked then for the 10 small companies that started the co-op—one of only two nationwide, according to the Central Station Alarm Association—and it continues to work today. More than 130 companies now share ownership of the monitoring facility here, which has grown to handle 36,000 accounts.

“The company is doing quite well,” said Ron Wies, general manager of Monitoring America since 1996. “We’ve been debt-free now for almost 10 years. We own the property where our building is and we’ve paid dividends to members in every year except one.”

Wies wasn’t always a believer in Monitoring America. When the company opened its doors, he bet against it—literally. He thought that a central station co-op was a good idea, but he didn’t think alarm companies could work together well enough for it to survive.

“Five of us [alarm company owners] each pitched $100 into a betting pool and predicted Monitoring America would fail, with the idea being that whoever got closest [to the date] would get the $500,” Wies told Security Systems News. “In 1991, the company was still in business and doing quite well, and none of us had given them two years. So we took our $100 out of the pool, put it back into our pockets and said, ‘Well, that was fun, but we were wrong.’”

Wies soon joined Monitoring America and moved his company’s accounts there. He was elected to the board of directors in 1994 and became GM two years later when the former manager resigned.

Each member of Monitoring America owns one share of stock in the company, with dividends paid based on the profitability of the co-op and the number of accounts each member has—the larger the account base, the larger the dividend. It’s a benefit that Wies uses as a marketing tool.

“When I’m talking to prospects, I tell them we are the only central station out here that is going to send you a check at the end of the year,” he said.

Another benefit for members is being able to have a voice in how the co-op operates through its board of directors. The seven members of the board are elected to three-year terms and can be re-elected. Monthly meetings are open to membership, as is the board’s annual meeting.

Jennifer Jezek, president of York Electronic Systems, a co-op member based in Broken Arrow, Okla., said the fact that any company can be represented on the board improves communication and increases the sense of ownership in the venture. Jezek is the daughter of Steve York, one of the founding members of Monitoring America.

“If you have an issue with an operator and how they handled a call, you can impact how they train them,” she told SSN. “Or if you have an idea about how to handle service better, you can communicate that. For example, in recent years we added IP receivers. Membership determined what kind of receivers we were going to get and when we were going to invest in them. The ideas come from members—we need this technology, we need this added.”

Jezek said her company uses Monitoring America for its central station service—it’s Five Diamond-certified by the CSAA—and for answering phones after-hours.

“We provide 24-hour service for our customers,” she said. “They answer the phone ‘York Electronic Systems.’ They have the ability to look up your account information, dispatch a service tech, whatever the issue may be. Every member is uniquely identified as their own company.”

Wies said that Monitoring America’s membership is growing again after taking a hit in the recession, which he said was especially hard on “mom and pop” operations.

“The economic downturn really did hurt a number of our members and literally put them out of business,” he said. “They wound up selling their accounts and going elsewhere. Monitoring America does not buy accounts—we’re not in competition with our members at all. The accounts that were sold were sold to other central stations or alarm companies, and we basically lost all of those accounts and the dealers as well.”

A big plus for Monitoring America was that it was debt-free going into the recession, Wies said. In addition to owning the property where the company is located, it is looking to build a redundant facility on property it owns north of Tulsa.

“To some extent it depends on the overall economy. Subscribers buy alarms when they can and some cancel service almost immediately when things go south,” he said. “But all in all, we’re looking good for 2013. I’m pleased so far.”