Prop. 35 Pits Civil Engineering Firms Against Union.

Here we go again.

Civil engineering companies -- in L.A. and throughout the state -- and the union for state engineers are squaring off over Proposition 35, a measure on the Nov. 7 ballot that would make it easier for the state Department of Transportation to contract out engineering work to private firms.

At stake are hundreds of millions of dollars a year in state contracts. Civil engineering firms -- including Santa Monica-based Psomas Inc. and Pasadena-based Parsons Corp. -- are after a larger piece of the action, while state engineers want to prevent more work from being contracted out.

Each side says their stance would save taxpayers money and speed long-delayed projects through the pipeline.

"It's terrible for the state not to use engineering companies when there is this tremendous backlog of work -- billions of dollars worth -- that needs to be done on highways," said Paul Meyer, executive director of Consulting Engineers and Land Surveyors of California, which represents 1,100 engineering firms and is the main sponsor of Prop. 35.

Opponents, however, counter that the measure would open up Caltrans to sweetheart deals with private engineering firms that would end up costing taxpayers more money.

"This is a terribly misleading initiative," said Ted Toppin, a spokesman for the No on Prop. 35 organization. "The large engineering firms want to get no-bid contracts from Caltrans; they want to dispense with the most important criterion for taxpayers, which is the cost-effectiveness of these contracts."

Through the first six months of the year, engineering firms raised $2.25 million in support of the measure. The bulk of the money has come from major national firms like Denver-based CH2M Hill Inc. and New York-based Parsons Brinckerhoff Inc., as well as local firms like Psomas and Parsons Corp.

Over those same six months, Prop. 35 opponents raised $1.85 million, mostly from the Professional Engineers in California Government union.

(Third quarter contribution figures were filed last Friday and won't be available until mid-October.)

Ballot replay

If this all sounds vaguely familiar, it should. This same issue was on the June 1998 ballot and is the latest incarnation of a 15-year feud between private-sector civil engineering firms and state engineers over contracting out Caltrans work.

The feud started and was fed by attempts by Republican governors George Deukmejian and Pete Wilson to contract out more Caltrans work to the private sector.

The 1998 measure was placed on the ballot by the PECG union as a part of its two-pronged strategy to reduce the amount of engineering work contracted out. But the initiative was defeated when an overwhelming 62 percent of voters cast ballots against it.

However, the other aspect of PECG's strategy proved more successful. In 1997, the California Supreme Court sided with PECG and agreed to limit Caltrans' contracting to emergency jobs or those that require specialty services not available in-house.

It's those restrictions that Proposition 35 seeks to overturn.

Since the court ruling, Caltrans has added about 2,000 in-house engineers to handle the huge influx of design work brought about by the state's burgeoning budget surplus, bringing the agency's total number of engineers to 12,000, according to Caltrans spokesman Jim Drago.

Meanwhile, the amount of work contracted out to private engineering firms fell off sharply in 1998 and 1999, reaching a low of $131 million last year. It has risen slightly this year as the amount of specialty work needed has increased.

Nonetheless, in the last couple of years, local engineering firms that had been relying on Caltrans work have been forced to turn elsewhere for contracts.

"Following that 1997 decision, we saw several existing contracts terminated by Caltrans, as well as several that we had been selected for," said Chris Clark, vice president and San Francisco area manager for Pasadena-based Parsons Corp.

This same scenario played out at Santa Monica-based Psomas.

"We've been looking outside of California for work," said Tim Psomas, president of Psomas Inc., which three years ago received nearly one-third of its revenues from Caltrans. "If this measure fails, we will have to continue this focus outside the state."

Keeping local contracts

But Psomas and other Prop. 35 advocates said the real fear that provided the spark for Proposition 35 was the threat of losing local government contracts that don't involve Caltrans work.

Proponents contend that over the last year, attorneys representing local government agencies have grown increasingly concerned that if these agencies contract out work to the private sector, they might open themselves up to lawsuits from public employee unions seeking to expand the scope of the 1997 state Supreme Court decision.

"After 1997, we had no contracts from Caltrans, which was a big blow to a small firm like ours," said Stephanie Wagner, owner of Wagner Engineering & Survey Inc. in Sherman Oaks. Wagner employs eight people and says she does roughly $1 million a year in billings.

"That forced us to rely more than ever on local (government) contracts," she added. "The prospect of losing even those contracts is what prompted-me and others in the civil engineering community to go all out and get this measure on the ballot."

But Prop. 35 opponents say there is no threat that local governments will turn off the contract spigot.

"In the three years since the court ruling, there has been only one published decision regarding a local government's ability to contract out, and that decision went against the public employees," said No on 35 spokesman Toppin. "This whole issue has been blown way out of proportion by the engineering firms."