POSITIONING FOR THE UNKNOWN
Environmental Consultants Saw Billings Rise Last Year.
Now They Wait for Government Cuts
By CHRIS CZIBORR
Billings at Orange County environmental consulting companies were flat for a second year in a row.
The big issue for consultants, however, is whether they will take a beating in 2004 and beyond as the state moves to cut into its budget deficit by curtailing public projects.
The 30 biggest environmental consultants in OC recorded billings of $406 million in 2003,unchanged versus last year. Billings for OC’s top consultants also were flat on the 2002 list after rising 16% a year earlier.
This week’s Business Journal list ranks environmental consulting companies by billings generated out of their OC offices. Estimates were made for four of the companies. Without those estimates, the remaining consultants posted 1% growth in local billings.
Consultants showed signs of the economic recovery, with workforces growing 4% to 2,295, according to the 26 companies that reported local job figures.
Environmental consultants often see big swings in billings when big, long-term projects come to an end. Many projects begin or rely on government funding at the local, state and federal level.
Maintaining the No. 1 spot was the Santa Ana office of Denver-based CH2M Hill Cos., which grew billings 1% to $54 million.
The Irvine unit of Baton Rouge, La.-based Shaw Environmental & Infrastructure Inc. retained its No. 2 slot, with billings flat at $43 million.
Moving up a notch was No. 3 San Francisco-based URS Corp. The company’s Santa Ana offices grew billings 11% to $42 million for the year ended October 31. URS does work for the Orange County Trans-portation Authority, Army Corps of Engineers and the Los Angeles Unified School District.
The Irvine office of Cambridge, Mass.-based Camp Dresser & McKee Inc. held the No. 5 spot, despite a 16% drop in billings to $25 million. The company said the decline was due to the completion of a big project with the Orange County Water District.
One of the list’s biggest gainers was the Irvine office of Arlington, Va.-based Environ International Corp., which moved up five spots to No. 12 on billings growth of 33% to $10 million.
“Our clients are largely on the legal side,we do a lot of litigation-related assessment work,” said Managing Principal Douglas Jones, who declined to name customers. “That client base isn’t always subject to economic hard times as more industry-based companies are.”
The Irvine office of No. 12 Atlanta-based GE Energy & Environmental Research Corp. fell three notches. The company cut its OC workforce from 60 to 35, due to reshuffling at its units. The Business Journal estimated GE Energy’s OC billings at $10 million.
“We spun off people to other GE entities,” said Wayne Plizga, GE’s vice president of finance.
The Costa Mesa office of No. 15 Emeryville-based LFR Levine-Fricke moved up three notches with 44% growth in billings to $9 million. The company saw its local workforce grow 30% to 52.
“A couple of years ago we went through a bit of a reorganization after years of declining earnings,” said Jay Shipley, LFR’s Southern California operations manager. “We got rid of some principals that weren’t performing. We brought in a bunch of younger technical staff and focused more heavily on sales.”
The major share of LFR’s work is in the private sector. Shipley said he expects continued growth in 2004, albeit at a more modest level.
“I think right now, based on backlog, we’ll probably be up about 10% from last year,” Shipley said.
The Aliso Viejo office of No. 18 Shoreview, Minn.-based Delta Environ-mental Consultants Inc. held its spot on 25% billings growth to $8 million.
Helping the gains at Delta: “Continued heavy environmental regulation by the state, especially relating to underground storage tanks,” said Richard Silverman, the company’s general manager.
Another big gainer on this year’s list was the Irvine office of No. 22 Sacramento-based Jones & Stokes Associates Inc., which moved up seven notches on a 57% billings jump to $5 million. “The growth is being driven by big projects like the (proposed) OC CenterLine project and on-call services for the Port of Los Angeles,” said branch leader David Freytag.
Decliners included the Irvine office of No. 19 Alpharetta, Ga.-based Mactec Engineering and Consulting Inc., which fell nine spots with a 55% drop in billings to $6 million.
Most of Mactec’s decline came after work for a major client ended, according to Steven Howell, a Mactec vice president.
“We also moved some of our environmental work to our Los Angeles office,” he said. Mactec’s OC workforce shrank 50% to 30.
List newcomers included No. 24 Garden Grove-based Patriot Environmental Laboratory Services Inc. Patriot said OC billings grew 17% to $4 million last year. The company boosted its OC employment 58% to 41. “Most of that growth is due to more sales people,” said Todd Wilson, a Patriot vice president.
Also debuting on the list: No. 30 Irvine-based UltraSystems Environmental Inc., which grew billings 57% to $3 million.
Dropping off the list were former No. 26 Huntington Beach-based Asset Group Inc., the Irvine office of last year’s No. 26 Cape Environmental Management Inc. and the Santa Ana office of former No. 30 Westford, Mass.-based ENSR International.
Consultants Brace for State Funding Cuts
Environmental consultants are keeping a nervous eye on Gov. Arnold Schwarzenegger and state lawmakers as they prepare to make cuts to government works projects.
“We’re taking a wait-and-see attitude, but nothing is on hold at our Southern California offices,” said David Freytag, branch leader for the Irvine office of Sacramento-based Jones & Stokes Associates Inc. “We want to make sure we’ve got a good mix of projects covering federal, state and municipalities. If stuff dries up in one area, hopefully there’s still money in other areas.”
Consultants say it’s critical to have a mix of work between public and private projects.
“Some of the people in the regulatory sector could find their jobs are at stake,” said Richard Silverman, general manager at Delta Environmental Consultants Inc. in Aliso Viejo. “That would cause an additional burden on those who remain after the cuts.”
When agencies lose staff it could take longer for companies to get projects approved by the state.
“There may be a potential effect from state layoffs in that some of the work may slow down,” said Douglas Jones, managing principal for the Irvine office of Arlington, Va.-based Environ International Corp.
In fact, that’s already happening for Garden Grove-based Patriot Environmental Laboratory Services Inc., which has seen some government-related work slowdowns because of cuts, according to the company’s vice president, Todd Wilson.
“But private sector work is helping offset those cuts,” he said.
Chris Cziborr
