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Fire chief to break ice

Wednesday, February 23, 2011

Security Systems News is based in Maine, so the term “icebreaker” makes me think of the Coast Guard cutters that break up the ice on tidal rivers here so the floes don’t jam up in the spring melt and cause flooding.

But a different kind of icebreaker event will take place at the Electronic Security Expo in June—a kind of icebreaking very important to the industry because it focuses on building relationships between security professionals and public safety officials.

Jon Hannan, fire chief and homeland security director for Charlotte, N.C., will be the Industry IceBreaker Speaker at the Industry IceBreaker Luncheon on June 7.

Hannan said in a statement that he’s looking forward to speaking at the event. “I believe the relationship between security professionals and public safety officials is incredibly important,” he said. “I applaud and support any opportunity that allows us to come together to educate and empower each other so that we can become a proactive force for public safety.”

ESX, which is put on by the Electronic Security Association and the Central Station Alarm Association, is the education and networking event for security integration and monitoring companies. It will be held this year from June 6-10 at the Charlotte Convention Center in Charlotte, N.C.

Also given out at the luncheon will be the SIAC William N. Moody Award. That Security Industry Alarm Coalition award acknowledges individuals who give of their time and talents to alarm management issues.

In addition, the Police Dispatch Quality Award will be given to the alarm installation/monitoring company team that achieves the highest police dispatch quality in a North American city/county. The deadline for submission is next Monday, Feb. 28. For more information, click here.


Mass messaging and more at fire conference

Thursday, February 17, 2011

Learn what’s hot in the field at the Fire Protection Research Foundation’s 2011 Suppression, Detection and Signaling Research and Applications Conference in March in Orlando.

Among the featured presentations will be the latest human behavior research and case study implementation of emergency communication messaging in the fire context, according to the National Fire Protection Association.

Kathleen Almand, executive director of the research foundation, told me recently that the best way to formulate an emergency message is “an emerging topic because fire alarm systems are being used for emergencies other than fire … What are the right messages? … You don’t want to incur panic.”

She told me all the foundation's research is geared toward making NFPA codes and standards better.

The 15th annual SUPDET will run from March 22 to March 25.

The conference is for fire detection, suppression, and signaling professionals from around the world to exchange ideas, innovations, and the latest information on current research, according to the NFPA. The Fire Protection Research Foundation is an affiliate of the NFPA.

This year’s program will feature 35 presentations in six sessions: notification and human behavior; detection; sprinkler protection; water mist; clean agents; and featured research at the U.S. Naval Research Laboratory.


The growing Article 6-E index

Thursday, February 17, 2011

From the first story I wrote about Article 6-E, the proposed central station licensing legislation being kicked around over in New York, through the blog posts and follow up stories and videos, I've come across A LOT of printed material. From the proposed bill itself, to pro- explanations thereof and con- dissections as well.

The most recent story on Article 6-E, which includes industry impressions of the Feb. 10 meeting, is on our site now, as well.

In talking with a few other security industry executives, I decided it would be a good idea to start putting all of these letters and emails to which I've been privy up online in one place where everyone could get a look.

A few words on permissions to reprint: If the letter/email appears here it was posted online for general consumption, or I have either asked for and received permission from the organization of origin to post it or it was sent directly to me by the organization of origin.

I do not claim to have ALL the letters that were sent to the NYBFAA prior to their Feb. 10 meeting (I sure would like that...), but have included the ones I've managed to come across. I would ask that if you don't see your letter here and you want it posted for the industry to read, PLEASE SEND ME A PDF AND I'LL ADD IT TO THE DIRECTORY.

I have not included a lot of material that has appeared either on ACCENT or in Ken Kirschenbaum's newsletter. If you contributed something to those sources and would like it included here, please turn it into a .pdf and send it to me and I'll do my best to keep this index current.

Please feel free to add your comments on this posting or on Article 6-E in general. I welcome all viewpoints and opinions.


Security industry lends a helping hand

Tuesday, February 15, 2011

I picked up a tweet today from ADS Security.

It said "ADS Corporate, Central Station & Nashville Sales went head-to-head in a @Soles4Souls shoe drive. Who secured the win?" Of course, I was intrigued and had to click.

I've been spotlighting security companies that do cool charity type stuff for a while. I've certainly covered ADS' efforts before.

And since they mentioned the central station throwing down against the other divisions, I had to check it out.

It appears that the central station, ADS Security corporate, and the Nashville sales office all formed teams and brought in as many shoes as possible for needy families. From ADS' Facebook page:

ADS kicked off the work week by counting the number of shoes that had been collected for a recent Soles 4 Souls shoe drive. Corporate, Central Station and Nashville Sales competed head-to-head for the title of “most shoes collected” and Central Station was a `shoe-in' with a total of 114 pairs. Combined, the groups were able to proudly donate 267 pairs of shoes! Congrats and thank you to everyone that participated.

Here's a pic from ADS' Facebook page that lists the final score of the ADS Shoe Drive Showdown:

267 pairs of shoes for the needy is pretty awesome. But what's awesomer (yes, that IS a word) is that the Team Central Station picked up 114 pairs! GO Central Station! Go Monitoring!! I love my beat.

You can follow ADS on Twitter and me on Twitter if you want to hear more.

Illinois fire-monitoring bill ignites protest

Friday, February 11, 2011

The industry is raising an alarm over a proposed new law introduced this week in the Illinois General Assembly that would allow public fire districts in the state to take control over fire alarm monitoring.

The bill, which the security industry in this state considers a job-killing, monopoly-creating measure because it would allow fire districts to mandate that everyone in the district use the district’s monitoring business, has been pending for a while now. When I wrote about a court case relating to this issue back in December, I noted then that the Illinois Electronic Security Association didn’t like the proposal. Now that HB 1301, entitled the “Fire District Antitrust Exemption,” has been formally introduced, IESA likes it even less. The group is urging Illinois alarm dealers and others involved in the industry to contact their elected representatives in Springfield to tell them how passage of the law could negatively impact their business.

“The primary motivation of the proposed bill is to take over an area of private business that took over a hundred years for private industry to build. It is a revenue booster for fire districts. It does not, however, improve response time or increase firefighter safety. As such, HB 1301 should be rejected,” the IESA said in a statement released yesterday.

Supporters of the bill argue that allowing a district to have complete authority over a wireless radio network or other network within the district is a safer and faster way to do fire monitoring.

But the IESA said that the bill “is not about public safety.” “

It explained that “districts currently have the authority to adopt and enforce rules consistent with the national fire codes (such as the National Fire Protection Association) that provide comprehensive coverage of alarm monitoring (e.g., what technologies are allowed, what is required for alarm monitoring),” the IESA said. “This legislation is designed to allow districts to monopolize alarm monitoring and arbitrarily exclude viable technologies in direct opposition of the national fire codes.”

IESA also said there will an upcoming Legislative Day in the state capitol, the date of which has yet to be set, on which industry members can talk in person with lawmakers about this bill.

I’ll be talking to Kevin Lehan, executive director of IESA, next week to learn more about this issue. Stay tuned.


Barnes: Do conditions today favor larger players?

Friday, February 11, 2011

Is there something about the market today that is favoring the big players in security over the smaller players? This is a question that Michael Barnes will address today, Feb. 11, on Day 2, of the Barnes Buchanan Security Alarm Conference, here in Palm Beach.

Today starts out with Mike’s “much anticipated” state of the industry address. Among several other topics, Mike is going to talk about data that shows that the share of RMR owned by the big guys has increased steadily over the past four years.

The big guys are the five largest players in the market and the top 95 companies. The small guys are the rest of the players in the market.

Traditionally, the small guys have had a slightly bigger share of the RMR pool. The reason, Mike surmises, is that they’re more nimble, they know their markets so well that they’re a worthy competitor to any of the “big guys” who try to sell in their market, and they’ve got customer service nailed.

In  2000, according to Barnes’ Associates data, the smaller players owned 49 percent of the RMR pool. That number grew steadily until 2006, when the small guys owned 58 percent of the RMR pool.

From 2000 to 2006, “there were a lot of acquisitions,” which is typically the way the big guys gain big chunks of RMR, Mike said. “But still, in those years, the small guys still outpaced the big guys.”

However, since ’06 the big guys have steadily gained back the share of RMR they lost in the six preceding years. In 2010, the share owned by the little guys is back to 49 percent, according to Barnes’ data. “Without a lot of acquisitions, the big guys beat out the small guys,” he said. 

There may be something about the market now “that favors larger, more sophisticated, capable companies,” he said.

Barnes was quick to say that he’s not predicting the death knell of the small companies... “far from it,” he said. Still, the data suggests there’s been a change, perhaps it has something to do with more internal discipline, more finely tuned customer service, more of an ease with newer technology. More on this and other trends after today’s address.

In the meantime, a few notes from Day 1 presentations.

Well first, a non-note, CapitalSource’s Bill Polk did not give his annual talk about the debt markets. “Too many tomatoes,” he told me.  Bill did, however, provide a debt market report on paper.

A few bullets from his paper: “Markets are focused on the good news (ie. U.S. corporate profits growth and margins, bank and corporate liquidity, low interest rates, lower commercial loans-and credit card delinquencies...) and are looking beyond the bad news (unemployment rates, factory orders backlog, suppliers delivery index, European sovereign debt challenges...) Most of all the markets are looking beyond “the elephant in the room—the need for federal government fiscal restraint,” he reports. And there continue to be problems at the state level as well. 

More bullets from his paper on the implications for the security industry: Polk reports that “strategic and financial buyer interest is strong across many subsectors and industry credits remain strong. Credit will be less expensive, but a focus on quality continues. Industry transactions will continue to feature club deals. Frothy loan market will translate into continued interest in placing debt capital into the security industry. Private equity is still under pressure to deploy capital... and is discovering security as an attractive investment.”

Sean Forrest, CFO of summer model company, Pinnacle Security, formerly of the PrivateBank and before that, worked with Tim Whall as CFO of HSM gave a talk yesterday.

Sean’s advice: “Invest heavily in your CFO,” to laughs, of course, but he said he’s given that advice often over the years, and never had anyone say it is bad advice.

Bankers need to understand the alarm business, but Forrest said security operators need to understand what bankers need from them as well “Anticipate their needs, and get them what they need to get you through the approval process.”

It’s a good idea to find some common ground with your competitors. He said Pinnacle and APX Alarm/now Vivant, have “helped each other out with licensing.”

While strategic vision for a company is “necessary and important, operating discipline is far more important in the success of an alarm company.”  Asked if he today he’s seeing “the most money ever chasing the industry?” Forrest answered: “absolutely, not just in debt, but in equity.”

Interest is driven by recent large deals. The big companies are buying, but the industry is not yet consolidated, he said.

“The middle market keeps redeveloping and reinventing itself, sometimes with the same teams.”

I’ve got more on yesterday’s New Deal panel, Technology panel and ADT’s John Koch’s address, which I’ll post later.


Future of Article 6-E and national central station licensing being discussed now

Thursday, February 10, 2011

So the NYBFAA's board of directors meeting is going on right now at ADI's Albany headquarters. Last time I spoke with NYBFAA executive director Dale Eller he told me that just prior to the Feb. 3 deadline for submission of written comments on Article 6-E there were 20 RSVPs to attend the meeting and open discussion forum. He also said just prior to the Feb. 3 deadline for written submissions there were a dozen concerned security industry members who had voiced their opinion in writing.

This promises to be a busy, boisterous and vocal day over in Albany!

I first wrote about this proposed legislation last year when USA Central Station's Bart Didden began making noise about it on the CSAA-administered ACCENT Listserv. I've since written a follow up story and done a bit of blogging about the issue and discussed it at ssnTVnews as well.

Regardless of how you feel about Bart or his stance, he sure did get the ball rolling.

One security industry exec to whom I spoke, and who requested anonymity, told me that in his 30 years in the industry he had never seen a bigger story than that into which Article 6-E was turning.

I spoke with early critics like John Doyle and with CSAA president Ed Bonifas, who at first said he felt CSAA had to remain neutral until a consensus was reached. It appears that consensus has occured.

I got a letter from Ed to NYBFAA president Joe Hayes on Feb. 8 in which Ed steps away from the middle and places CSAA's stance clearly in the anti 6-E camp.

Dear Joe:

As you know, the issue of the proposed NYBFAA Licensing legislation, known as '6-E,' has been discussed within the Central Station Alarm Association (CSAA) membership for the past several weeks. It is our understanding that the proposed legislation would require the licensing of central stations and operators within and outside of New York State.

The New York State licensing issue was discussed at length during our recent Long Range Planning meeting. After hearing both sides of the issue, a majority of those participating indicated that they are opposed to any further licensing that may add burdensome costs and add little to public benefit.

The issue was then referred to the CSAA Board of Directors, who voted nearly unanimously not to support the proposed legislation in its current form.

The view of most CSAA members with whom we have discussed this issue is that while licensing reciprocity is something we would all like to see, addressing it on a state-by-state basis would only create more impediments, costs and regulatory requirements than are necessary. CSAA believes that this issue should be addressed instead at the federal level.

We hope that you will express our opposition to this proposed legislation to your members. You have received numerous individual letters from our membership and others to the same effect. Our official position on this matter represents the will not only of our board and members, but also numerous non-members in the central station industry who have communicated their concerns to us about the proposed New York State licensing legislation.


Ed Bonifas, CSAA president

Really, Ed isn't saying much of anything new. He said, when I spoke with him that he felt the issue should be tackled on a national level rather than a state-by-state approach, but then said CSAA was neurtal... Really, saying that state-by-state is the wrong way to go, is anti-Article 6-E.

I also picked up some chatter about 6-E over at Ken Kirschenbaum's newsletter. Mike from CSS asked Joe Hayes through the newsletter "I have read the proposed law (several times).  Can you tell me who decided to bring this issue to Ex, Senator Foleys Office? Who were the main players in writing this proposal?" To Mike, I can tell you that I found after speaking with both the Article 6-E Review Committee and the ex-senator's office a discrepancy about where the proposed legislation came from. Each party said the other originated the proposed legislation. You can read about that in the first story I wrote on 6-E, as well as in its follow up.

Also via Ken's newsletter, Danny Dunson from Direct Alarm in Griffin, Ga. gives a few very good reasons why the legislation is unneeded.

Dear Mr. Hayes and board members,

I would like to express opposition to the proposed legislation, known as 6E, which would require state licensing of Central Monitoring Stations in New York.   Though Direct Alarm does not do business in the state of New York,  we are against any unwanted legislation that may set a precedent for other states to follow.  While the proposed legislation may have good intentions behind it, the legislation is unnecessary for the good or  betterment of the electronic security industry or its consumers. The following are a couple of reasons that we feel make the legislation unnecessary.

Central Stations are already governed by their clients.

Electronic security companies demand quality from the central station that they use so that their end-users are satisfied with service and response. A few of the things that electronic security companies demand from their central stations are: a UUFX Underwriter's Laboratories (UL) listing, a Factory Mutual (FM) approval, and a CSAA certification.

Government is not competent enough to provide a service to this industry.

Professionals at Underwriter's Laboratories, Factory Mutual, and CSAA have spent decades researching the industry in order to provide ample, precise, and stringent standards and requirements which Central Monitoring Stations use to govern themselves. In no way will the government of the state of New York be able to provide a positive or useful service to the electronic security industry or the central station industry in the face of what is already present and changes daily.

Thank you for considering our firm stance on the proposed legislation 6E. I hope that you will govern yourselves accordingly and do what is best for the industry and its consumers and do away with this proposal and all that bear similarity to it.

Regardless of whether you're pro or con or have no opinion either way, this is looking like a seminal event in the industry, if it can get enough people talking and enough momentum to address the issue on a national level. I'll continue to cover this story as it develops.

I spoke with Doyle Security president John Doyle late yesterday. He was leaving the NYBFAA meeting in Albany. He seemed pleased with how the meeting had gone:

"There was a great turnout at the meeting of members and guests. I was just pleased that they had this meeting. It was well organized and everyone got to say what they wanted to say. I feel like I was listened to and I feel it was a healthy airing of thoughts and opinions."

John also said that CSAA’s message arguing the issue of state licensing/reciprocity should be handled on a national level did get through. Again, I'll have more as it becomes available...

Securing the food supply

Thursday, February 10, 2011

It’s one of those things I really, really don't like to think about—the idea that our food or water supply could be a terrorist target. Maybe that's because the idea of actually protecting the food supply seems so daunting. Protecting miles and miles of wide open farmland? How do you do that? Also, further along in the chain, the idea that the FDA and other government officials are not keeping a very, very close eye on food production (or have had the resources cut so they can't keep a good eye on things) and processing is just plain gross.

Remember Upton Sinclair's 'The Jungle'? 

Our sister publication, Security Director News, has done some reporting on the Food Modernization Act, which President Obama signed into law last month. And, the other day (as we were shipping off our March issue), a release popped up in my inbox about ADT’s work with food manufacturers.

From the release: “As part of the food safety legislation, food manufacturers and suppliers will be required to identify potential problem areas that might affect the safety of their products and outline ways to prevent or circumvent those areas of concern.  ADT, the leader in electronic security solutions, is working with food manufacturers to meet these new regulations by providing security tools and solutions that food suppliers and manufacturers can use to help keep their products safe and untainted.”

Hank Monaco, vice president of commercial marketing for ADT, is quoted as saying that the company’s has been working with “food manufacturers and suppliers on security for a number of years and have been a leader in the development of many of the food defense strategies and solutions used today ... Now that the mandates have been signed into law we believe we can use our expertise and knowledge to help others in the food industry achieve the same high levels of security and safety.”

ADT is working with” Arrowsight, a provider of remote video auditing services and software, and is using it in the Huntsville (Ala.) Food Defense Demo Lab to show food manufacturers and people in the industry new technologies and solutions in a real-world setting and how they can help keep the food supply chain safe and secure from sabotage.”

Interestiing, I've got a call into ADT to find out more.

On a much lighter aside, I just looked at an FDA link to information about the bill. Did you know that the FDA commissioner’s name is Dr. Hamburg?


Sale of beach house to help pay back McGinn, Smith investors

Wednesday, February 9, 2011

This month brings a new development in the court case against Timothy McGinn and David L. Smith, two New York security alarm industry investors the SEC has charged with defrauding investors of more than $80 million in a Ponzi scheme. On Feb. 1, a judge ruled that a vacation home in Vero Beach, Fla. that Smith and his wife bought 10 years ago be sold to help benefit investors.

It turns out the monthly mortgage of $6,188 on the home, worth an estimated $1.7 million to $1.9 million, hasn’t been paid since April of last year, when the SEC filed charges against McGinn and Smith and their assets were frozen, according to the judge’s order. The two were principals of McGinn, Smith & Co., an Albany-based investment firm that conducted investment dealings in the alarm industry. The SEC contends that from 2003 to 2009, the pair diverted funds into financially troubled entities and also into their own pockets, and to pay for exotic dancers on McGinn’s You Only Live Once cruise ship business.

Various other expenses for the Smith home at Orchid Point Way have gone unpaid and upkeep hasn’t taken place, according to the ruling by Magistrate Judge David Homer in U.S. District Court in the Northern District of New York.

In his order, the judge said those included landscaping at $475/month; pest control at $100/month; pool cleaning at $86/month; utilities at $530/month; insurance at $796/month; taxes of $1,875/month; monthly dues of $1,375, and various additional assessments totaling $1,060. Including the mortgage payment, the monthly costs for the house exceed $13,000, the judge said.

The judge wrote he was concerned that the value of the property could diminish with the place not being kept up. The judge said the mortgage holder also might foreclose on it because the mortgage isn’t being paid. He ordered the sale of the property “to halt the diminishment of its value and to realize the greatest possible return.”

Although Smith and his wife, Lynn, bought the house together in 2001 as a second vacation home, the property in 2009 was transferred into the name of Lynn Smith alone, the judge noted. Lynn Smith plans to seek a stay on the sale while she appeals the judge’s decision, according to court records.

Another place that might be a source of assets for investors is a security company that McGinn, Smith & Co. ran called Alarm Traders, according to a recent blog item in the Albany Times Union newspaper.

That paper reported that Alarm Traders, a buyer and seller of alarm monitoring accounts to security companies, remains operating and owns thousands of contracts. The court-appointed receiver overseeing McGinn's and Smith's assets said it was possible that company could be sold to help pay back investors, according to the paper.

In another recent ruling in the case, Judge Homer found McGinn, who served as CEO of IASG from 2003 to 2006, in contempt of court for his involvement in a new investment venture started this past summer. The judge said the new venture, Security Alarm Credit, appeared "remarkably similar" to the prior offerings that got McGinn in trouble with the SEC.



ESX announces keynoter for 2011 show in Charlotte

Wednesday, February 9, 2011

ESX on Tuesday, Feb. 8 announced its keynote speaker for ESX 2011. ESX 2010  in Pittsburgh introduced me not only to Verizon sniffing around security (and we all know how that story played out...), but to football great Rocky Bleier, as well. Seriously, I'm not a sports guy, so I'd never heard of him, but I was impressed with his presence, humor and ability to relate his old football yarns to business intelligence.

Perhaps hoping to cash in on that same magic formula from 2010, this year, ESX has announced football coach and NASCAR team owner Joe Gibbs as its keynoter for the show in Charlotte, N.C. from June 6-10.

From the ESX release:

This former NFL football coach and NASCAR Championship team owner, is well known for his work ethic, transforming the average NFC Washington Redskins team into Super Bowl titans and taking drivers Bobby Labonte and Tony Stewart to the finish line with NASCAR Cup Series Championships.

'I think all industries require solid relationships and hard work to thrive. I believe very strongly in these core values and I think many people connect with that message," said Joe Gibbs. "I'm looking forward to sharing my story at ESX.'

This game plan constructing legend will address security integration and monitoring companies as they revitalize their own profitable business plans at the only show organized exclusively for their needs.

It's a neat tactic to take someone who acts kind of as a Rosetta Stone to explain business principals in an atypical yet not uncommon language.

It will be interesting to attend the keynote address and see how it compares to last year.

ESX chair and dedicated security luminary George DeMarco seems excited about the choice of keynoter.

I am thrilled that Joe will be with us, delivering his perspective on the world of football, NASCAR and life outside of sports. He has inspired NFL football teams and NASCAR drivers alike. I believe his leadership skills and unique blend of energy and experience will take this year's keynote address to an entirely new level.

Gibbs’ keynote address luncheon will be held at the Charlotte Convention Center on Wednesday, Jun. 8 at 11:45 a.m.

Don't forget to register for ESX ASAP. It's an important show and I hope to see you there.