Outsourcing False Alarm Billing

Before you outsource your false alarm billing, consider the costs.

Some jurisdictions claim the only objective of their False Alarm Ordinance is to reduce false alarms
and not to generate income. But billing for false alarms and false alarm permits can generate significant
revenues - far in excess of the cost of administering a false alarm reduction program.

In these days of budget shortfalls, revenues from false alarm reduction programs can play a significant role
in recovering the cost of responding to false alarms.

When you outsource, the municipality incurs all of the costs of responding to false alarms, and the
municipality obligates alarm owners to pay for permits and false alarms fees, yet a large portion of the
revenues go to the outsourcing company which sends out the bills and collects the payments.

Let’s take a look at potential revenues from alarm permits and permit renewals.
It is not uncommon for a jurisdiction to charge $25 for an alarm permit and a similar fee for annual
renewals.  If a town has 2,000 active permits, that’s $50,000 in permit fees each year.

How much does it actually cost to bill and collect those fees?

Digital Design Group’s False Alarm Software automatically prints Permit Renewal Notices formatted for
window envelopes.  The only invoicing labor involves placing the notices in envelopes and taking them to
the mailroom; and the only material costs are the stamp, envelope, paper, and toner – less than a dollar
of invoicing costs per alarm site.

When a renewed permit and check is subsequently received, it will take approximately three minutes per
alarm site to update the database with any modifications to the emergency contacts, enter the payment
into the accounting module, and deposit the check.

The lion's share of the $25 permit/renewal fee is profit which can be used to recover dispatcher, officer and
vehicle costs of responding to false alarms.

Similar revenues can be generated from false alarm fees.

When you outsource your false alarm billing, a significant percentage of false alarm revenues will go
to the outsourcing company.

When you outsource your false alarm billing, the fees paid by your residents will leave the community
rather than recirculate in the local economy.

There are other costs such as employee time needed to answer questions from the public, PC’s, and a
one-time charge for false alarm software.  It is wise to examine the costs and benefits of administering
your own false alarm reduction program before you sign an outsourcing agreement.