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Good Ride for Environmental Firms

The payrolls of local environmental engineering and consulting firms have grown over the past year as real estate development showed continued strength and municipalities tackled more infrastructure projects.

Combined employment among the largest firms in the sector in Los Angeles County soared 11.2 percent in 2017 to 2,387 workers over the past 12 months, according to this week’s Business Journal list, which is ranked by local employee count.

The companies on the list combined for a 3.7 percent hike in employment to nearly 256,000 workers overall.

The firms take on various aspects of real estate development projects,

including scientific studies on soil quality, preparing formal reports, assisting with

grant writing to secure government funding and other matters. Clients range from private companies to regulatory agencies.

Business has been good across the board lately.

“It was an alignment where we had all sectors performing strongly with the exception of retail,” said Loren Witkin, chief executive officer at Glendale-based Citadel Environmental Services Inc., which came in 11th on the list with 53 employees countywide. Recent clients included Occidental College, which hired Citadel to determine air quality safety at one of its research labs.

Tetra Tech, which once again topped the Business Journal’s list, counts among its current projects the Lower Los Angeles River Revitalization Plan, which seeks to redevelop the lower 19 miles of the Los Angeles River.

The Pasadena-based company’s overall revenue rose 8.4 percent last year to $2.8 billion. It boosted hiring by 12 percent to employ 522 workers locally.

About 30 percent of Tetra Tech’s revenue typically comes from its work on behalf of the U.S. government, including agencies such as the Federal Aviation Administration, for which it does air traffic control modernization, according to Dan Batrack, Tetra Tech’s chief executive and president, in the company’s fiscal fourth-quarter 2017 earnings conference call.

Other work it performed included responding to the catastrophic wildfires that hit California last year, Batrack said.

No. 2-ranked Stantec Consulting Services Inc., headquartered in Edmonton, Alberta, also boosted local hiring last year by 12 percent, reporting 204 workers locally. Its western U.S. headquarters is in Irvine, but the company maintains offices in Pasadena, Woodland Hills and Van Nuys.

Stantec has grown via acquisition over the last couple of years, which has helped boost its gross revenue to nearly $4 billion in U.S. dollars at the end of 2017. Recent acquisitions include design firm RNL and water resources engineering company MWH Global Inc., both based in Colorado but with offices in downtown Los Angeles.

“Each of those provided a pretty significant impact to our L.A. County presence,” said Eric Nielsen, executive vice president and business leader in Stantec’s community development division.

RNL recently began work as a Stantec subsidiary assisting the City of Glendale with the architecture and design of the roughly $20-million, 25,000-square-foot Beeline Maintenance Facility for Glendale’s public buses.

Aecom was No. 3 on the list with 187 environmental engineering and consulting employees working in the Los Angeles area. Its overall size gives it advantages of scale as it employs around 87,000 people in total, and boasts annual revenue of $18.2 billion, up 4.6 percent from 2016.

San Onofre projects include the decommissioning of the San Onofre Nuclear Generating Station in San Diego County, and the $2.6 billion Los Angeles Rams stadium at the Los Angeles Stadium & Entertainment District at Hollywood Park in Inglewood, which will also house a second National Football League team, the Los Angeles Chargers.

Aecom also works on smaller projects, such as the new park proposed in front of the Los Angeles Public Library’s Pío Pico branch in Koreatown.

Torrance-based Partner Engineering and Science Inc. ranked fourth on the Business Journal list with 144 of its 700 total employees working locally. One of its projects is doing environmental site assessments in Los Angeles on behalf of Lithia Motors Inc., a Medford, Ore.-based company that’s one of the nation’s largest – and fastest growing – automotive dealership groups, and which has been buying up dealerships in the county.

One challenge the sector faces in such a competitive market is finding qualified workers, particularly when science and engineering degrees are required.

“Construction engineers are hard to hire when you see as many cranes in the sky as you currently do,” said Partner Engineering President Joseph Derhake.

Other headwinds include voters’ limited patience for paying more taxes to help fund public civil projects.

“We can’t continue to rely on tax increases to fund infrastructure work,” said Kelli Bernard, regional chief executive for Aecom.

In the Business Journal’s other list this issue of environmental waste management and recycling firms, ranked by the number of local workers, Houston-based Waste Management Inc. again ranked No. 1, boasting 1,321 employees in L.A. County. That’s a 4 percent year-over-year increase in workers. Meanwhile, Waste Management’s total revenue rose 6.6 percent to $14.5 billion in 2017.

Athens Services, headquartered in the City of Industry, came in second with 1,250 local employees, up from the Business Journal’s 2016 estimate of 400 locally employed workers. Republic Services Inc. of Phoenix was No. 3 with 950 workers employed in Los Angeles County, up significantly from 2016’s estimate of 500 employees.

Adding to these companies’ top-line growth was the decision in 2016 by the Los Angeles City Council to approve a multibillion-dollar waste hauling franchise system for commercial and multifamily properties.

The City Council’s aim was to replace the old open market for trash collection from commercial and multifamily properties with a tightly controlled system of exclusive franchises, thus reducing the number of trips made by garbage trucks.

The above three companies – along with No. 5-ranked Universal Waste Systems Inc. of Santa Fe Springs, No. 6-ranked Nasa Services Inc. of Montebello, No. 9-ranked Ware Disposal of Santa Ana and No. 10-ranked CalMet Services Inc. of Paramount – are the franchises given the contracts under the agreement.

These waste haulers have exclusive rights to their respective areas, divided up by ZIP code, and businesses cannot hire their own haulers.

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