Supra Information

Subsequent to that time - about five years ago - our dues structure was reduced to $150.00 per year (plus other user expenses) to reflect the full payment of those lock box exchange fees. The Supra system now operates on a pay as we go basis. The boxes are purchased individually by the members at our cost plus sales tax ($73.00).

The Supra keys cost are actually paid for from the initial application fee paid by new members and utilizes approximately 75% of that application fee. The balance of the application fee is applied to services like training and mailing software and initial member support that comes with all new members. Since this is a one-time cost to members and to RMLS we were basically breaking even on the operation of the Supra system from the hardware side. This, of course, is not taking into account the cost of maintaining records, supporting members with problems, replacing bad keys and bad boxes at RMLS expense and paying the cost of the 800 telephone number to access your update codes. This is all in addition to the initial cost of the computer hardware and software that runs the KIM system. From a revenue standpoint, a total loss to RMLS.

The new business plan of Supra Products calls for agents leasing the D-Keys from Supra at a cost of $88.40 per year including tax on the lease. This lease is directly with Supra. The lease is for a 6-year term at the same annual fixed price. This is for the D-Key product. The E-Key is more expensive at $26.45 per month including tax but also requires the user to purchase a Palm V PDA at their expense. The existing Lock Boxes will continue to work with the D-Key and E-Key. We have approximately 15000 of these boxes in our market area. An agent can terminate the lease anytime by returning the key to RMLS and indicating their desire to terminate.

RMLS is entering into an Administrative Agreement with Supra Products that basically calls for us to continue to provide most of the same services we have been providing on the Key box system. This is being done with NO revenue to RMLS for this Agreement. The cost of this administration is being absorbed in the dues dollars already collected from members. In other words, RMLS is subsidizing much of the continued operational cost of the Key Box system.

Many have asked what other action could be taken or what kind of action could be taken against Supra for requiring this change. The answer is none that we can determine. Supra holds patents on all electronic key systems in the market place. The only alternative key system that is available is a combo lock system from a sister company of Supra, Risco Products. The parent corporation of both firms is General Electric. The cost for replacing all the Boxes in the field would be very high on a one time cost basis.

The administration of RMLS has fought diligently to prevent this conversion requirement by Supra Products but without success. The main issue is that Supra will not continue to manufacture the AEII keys currently in use on our system. The result is that new members would not be able to acquire new keys and when keys go bad or get damaged, we would not be able to replace them for existing users. This would be a rather quick demise to the usefulness of the Key Box system. When it was finally determined we would not be able to stop the implementation of the new Keys, we responded by getting the best price possible for our members. Supra Products wanted a fee of $8.95 per month plus tax for the D-Keys with annual escalation clauses of approximately 2%. We were able to get this reduced to $6.95 per month for the full 6-year term.

New users (new members not holding the existing key) will need to pay a $50.00 initial fee plus the lease amount for the year. Year two of our agreement the fee goes to $55.00 and years 3 - 6 the fee goes to $60.00. Members who cuurently have a key are exempt from this charge if they convert to the new key pad during our conversion period.