The county’s largest environmental consultants saw local billings drop 12% to $523 million in 2009, according to this week’s Business Journal list, which ranks companies by environmental work completed by Orange County offices.
A virtual halt in commercial construction drove the decline, leaving most environmental consultants to compete with each other for relatively steady government and hospital work.
The drop was foreshadowed on last year’s list, when environmental consultants saw billings jump 8% on government projects but let go of 6% of their workers in 2008.
Local employment on this year’s list dropped 15% in the past year to 4,402 people.
Eight companies on the list saw their local billings drop by 18% or more in 2009. One company—the Irvine office of No. 18 Cambridge, Mass.-based Camp Dresser & McKee Inc.—saw its billings drop 74%, or by $26 million, to $9.1 million.
Bucking Trend
But some companies on the list managed to maintain or add work in otherwise slow times.
Denver-based CH2M Hill Cos.’ Santa Ana office saw local billings drop a reasonably modest 1.1% in 2009 to $109 million.
“While some areas of our business have been down, we’ve seen other areas remain stable,” said Kellie Freeman, acting area manager for CH2M Hill. “Overall, it has been more of a flat year than a seriously down year.”
The company is seeing continued demand for work cleaning up old waste treatment sites. Most of those projects are happening in Los Angeles and other Southern California areas, according to Freeman.
Consultants working from CH2M Hill’s Santa Ana offices have been assisting in those projects, she said.
CH2M Hill also has been consulting on solar, water and other “green” projects.
“We’re working with a public landfill to put solar panels on top of it,” Freeman said.
The company dominates the list, with 21% of combined billings.
Without CH2M Hill, environmental consultants here saw combined billings drop 14% to $413 million.
CH2M Hill saw local employment drop 12% to 262.
“We’ve had some people retire and transfer to other offices,” Freeman said. “Given the economy, those people haven’t been replaced locally.”
The local unit of No. 6 Los Angeles-based AECom Technology Corp., formerly known as P&D Consulting, saw some work put on hold amid the poor economy, said Michael Benner, vice president of environmental consulting group in Orange.
The company is estimated at $22 million in 2009 billings.
“Moving forward, we see a lot of activity with projects relating to development of transmission lines and substations in remote natural areas around southern California,” he said.
The entitlement process—from environmental impact reports to getting licenses and permits for transmission lines and power plants—is growing, Benner said.
“The regulatory environment is changing as new environmental guidelines are starting to be implemented,” he said.
No. 13 Irvine-based LSA Associates Inc. saw its local billings drop by 8.1% to $12.5 million.
The company has seen public works projects rising, offsetting a slowing in private projects, according to Les Card, the company’s chief executive.
The extension of Measure M, an add-on to the county’s sales tax, is helping to create more work, according to Card.
“We used to be 50% public and 50% private in terms of the environmental projects we worked on,” he said. “Now, the private work has been substantially decreased. But we’ve been able to replace most of the private projects with public works-related projects.”
But private projects could be on the rise again, soon, Card said.
“Our private clients are talking more about new projects these days,” he said.
No. 23 Irvine-based RBF Consulting, which saw its local billings drop 56% to $7.4 million in 2009, also sees public work as a bright spot.
The work tends to be long-term in nature, according to Mike Burke, executive vice president for the company.
“Some of the new regulations taking place are causing public works projects to be driven by environmental issues,” Burke said.
He cited a new set of statewide regulations designed to cut greenhouse gases.
“Cities like Fullerton are redoing their comprehensive plans for land use and transportation projects to conform to the new standards,” Burke said. “They’ve now got to add climate action plans.”
RBF is working with Fullerton on revising and updating past urban planning policies. The company also is working on projects with other cities to improve access for electric cars.
“They need to see what existing trails and low-use streets can be used for these vehicles, which generally don’t run as fast as regular cars and trucks,” Burke said.
Stimulus Package
Generally, environmental consultants haven’t reaped the benefits of last year’s federal stimulus program aimed at pumping new business into sagging segments of the U.S. economy, sources said.
Those funds were initially earmarked for “shovel-ready” projects, according to Eric Nielsen, senior vice president of No. 17 Stantec Consulting Services Inc., based in Edmonton, Alberta.
“We continue to build our businesses in transportation and public infrastructure because we think those are the two areas that will benefit the most from the stimulus package,” Nielsen said. “Our view is that the full benefits of the stimulus program are yet to come.”
The company’s Irvine operations saw billings fall 18.5% in 2009 to $9 million.
Stantec has been working with the Orange County Water District to improve existing water basins. The project started last summer and construction is expected to be completed at the end of this year.
New regulations requiring energy meters to be installed in commercial buildings could lead to more work for the company, according to Nielsen.
