Leadership, Resilience, and Community: Paul Reuter's Vision for Pace Engineering in Redding

Speaker 1

[00.00.00]

 Hi everybody in North State Rocks podcast. This episode really excited about. We have Paul Reuter, a good friend of mine. He is the managing engineer and president of Pace Engineering based in Redding, California. An incredible engineering firm. Incredible employees, 100% employee owned, just an amazing business with an incredible culture. Really excited for you to listen. 

Speaker 2

[00.00.27]

 Welcome to the 

Speaker 1

[00.00.28]

 North State Rocks podcast. 

Speaker 2

[00.00.30]

 Discover the hidden gems and extraordinary people of California's North State region. Join Perry Thompson, 

Speaker 1

[00.00.35]

 CEO of Hat Creek 

Speaker 2

[00.00.37]

 Construction Materials, as he explores the vibrant communities and interesting neighbors that make our region a great place to live, work, and play. 

Speaker 1

[00.00.46]

 Tune in, be 

Speaker 2

[00.00.47]

 inspired and rediscover the North State. This is your community. This is your story. 

Speaker 1

[00.00.58]

 Well, thanks for taking the time, buddy. I really appreciate it. So so this this is a North State Rocks podcast. This is Paul Reuter. Uh, I'm going to make sure I get this right. I think your title, official title is president and managing engineer of Peace Engineering. I'll get 

Speaker 2

[00.01.11]

 that right. You did. Yeah I know I know, we and I'm in vintage with you. So we say to CEO right. And I my my official title is president as well. And we use CEO. But I think more people know what CEO means than than president. So yeah that makes sense. Yeah. So I saw as this digital research kind of getting ready and I saw that you've been the, uh, the managing engineer for since 2008. 

Speaker 1

[00.01.38]

 Yeah. So? So can we just talk about that for a second? Um, first of all, that means you've been doing this for 17 years. So that's that's something that's something to be really proud of. But also especially for some of our younger audience, I don't think many people realize what 2008 was like in 2009 and 2010, like I was thinking of all the times to be thrust into the number one position at a large Redding based engineering firm. Uh, 2008 would not be my pick to be the one to go into that role. So can you reflect on that a little bit for us? Yeah. You know, at the time, Perry, I probably wasn't smart enough to realize, you know, what I was getting myself into, but I doubt that it, uh, it was funny that the first full year after I took over was the worst financial performance in the history of pace. We've been in business for 50 years. So I was like, okay, got that out of the way. 

Speaker 2

[00.02.36]

 No place to go. Give it up now. Oh, they go up from here. Yeah, yeah 

Speaker 1

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 yeah. That's that's you know, that 

Speaker 2

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 it was as you know, it was a tough time and and uh, we did. Have some lay off it. That was the time when in one day, every land development project that we were working on, they called and said stop and. Yeah. But despite that, you know, the the company still had a profit at the end of that year. And, and that wasn't what we were forecast or were hoping for, but we still had a profit. We still paid out dividends to our shareholders. And so it wasn't we didn't didn't completely fail. But it was a challenge for sure. 

Speaker 1

[00.03.15]

 Yeah. Okay. So that's incredible. I kind of just saw that that date and kind of just went down that rabbit hole immediately. But can so can you just give us a little bit. I mean, you said in 2008 the company been in business for 50 years. I know pace is 100% employee owned, which is just incredible to me because most of 

Speaker 2

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 the business 

Speaker 1

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 owners I'm talking to and businesses I'm talking to, one of their biggest challenges. There's their succession plan or in most cases, lack thereof. So can you just tell us a little bit about the history of pace, and you know, how long you've been in business? And then when it kind of became employee owned and then just a little bit about how. I mean, nothing proprietary, of course, but anything that's, um, that you can share about kind of how that process works. Sure. Yeah. And in 2008. I think we've been in business about 32 years. Perry. We're coming up on our 50 year anniversary next year. So we started in 1976, and, uh, it's really three individuals Larry Keppel, Paul Jones and Ray Tony that, uh, broke away from home Hill at the time and wanted to form a local engineering company that would allow him to be home at night with their families. You know, CH2, even back in those days, was a huge company and worked internationally. And they were in, you know, every other state of California for days at a time. And they had young families. So they started pace kind of out of their garage. And, uh, and then they, they developed a little office there on Court Street and then, uh, in, in the late 70s, they built the building on Court Street that we were in for almost 40 years and actually over 40 years. And, uh, so they started out just the three of them. And then slowly but surely, they, they added staff, they added, uh, survey department and, uh, got even a couple more guys to come over from Chatham Hill. And by the time I started at pace, I started as a student in 1990. I had finished my junior year in college, and the company was looking for a student intern to basically. Extract records from one of our clients to do a master water plan. And so I spent a summer digging into the the dungeon and and basements of old City Hall up in weed to try to find these old documents and and it took me about two weeks when I realized that I loved the company. Number one, the people. And I was like a 20 year old kid at the time. And and everybody just treated me with the utmost respect. And, and, uh, so it was that was a no brainer for me. But then the challenge was, is I was studying structural engineering at the time. Pace didn't need any structural engineers. They really needed water wastewater engineers. So I said, well, okay, what do I I'll switch to that. What's, uh what would you hire me then? And they said, well, we'd really like you to have a master's degree. I'm going, oh my gosh, 

Speaker 2

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 I'm ready to be done. And, you know, move on with my life. But I figured if that's what it's going to take to go to work there, then I'll do it. So 

Speaker 1

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 that's amazing. 

Speaker 2

[00.06.25]

 SAC state had a 30 unit masters with a comprehensive exam and a and a research paper, as opposed to a full thesis. So I went through that program. Pace actually gave me a letter of intent before I went off and did that. So it was really they kind of treated it as as a kind of a leave of absence. And then they loaned me some money to get the degree because my parents said, no, we're done bachelors. 

Speaker 1

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 And, uh, so 

Speaker 2

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 I didn't. I qualified for about a quarter of the money I needed in financial aid. So pace loaned me the rest. And, uh, I paid that back over the first year of my employment with them. And, uh, that was in 93. So, you know, fast forward several years, uh, Larry Keppel, uh, kind of the brainchild of our, um, of the original company. He retired in 1998, and Sam Smith took over and, uh, he held the president role till 2008. And, uh, they they approached me. I think at the time I was I was in my mid 30s and I was an associate engineer, and they approached me and I thought, really? I mean, what, you guys couldn't come up with anybody any better than that? I mean, jeez, you know, and, and uh, so they kind of felt that I was the one and I said, well, I'll, you know, I'll do the best I can and if that's what you think is best for the company. And so we did a three year transition where we announced the company that the transition was going to happen in 2005. So it gave kind of three years for people to. Yeah. Grab on it. Accept the fact. You know, I was younger than most in the company at that time. And, uh, that transition was a really good time because Sam was still here as the president, and he was kind of working me into doing some higher level things. And so that that worked really well. Um, so anyway, that the rest is pretty much history in terms of our ownership. Um, when when the founders were retiring in the late 90s, they had the forethought to develop an internal stock ownership program, and it was really generous of them. You know, it really required them to give something up, which a lot of founders aren't willing to do. And they really they they appreciated that if they if they were willing to give something up, they would get something, you know, from their investment. And, uh, so they, uh, they sold shares to, to other employees. And at that time, uh, the, the share buy in wasn't based on, you know, profits that people had to take second mortgages and or come up with their own financial means to, to buy into the ownership. And, uh, but once that started, then the buy in is done with annual bonuses from from profits the company. So there's no financial obligation by the individual to become a shareholder. They're essentially acquiring their ownership through the profits of the company each year. And it's a fairly unique program. I've talked to several individuals in our industry that have never heard of that, and I think now we've I think we've got about 40 something shareholders. And essentially when you become a licensed professional, whether it's in surveying or engineering at pace, you're you're brought in to the ownership program. We do have some non professional staff that we consider key, you know, key financial people maybe office managers, key technicians that have been here a long time and have key roles. But um that's generally how it works. So we really try to promote that, especially when we're hiring young young staff. And you know, it's kind of, hey, you know, you get out of school and you get your PE, you can have an ownership stake in your company in your mid 20s. And uh, and then that builds over time and, and uh. So it's been a been a really great program. And of course it's it's somewhat old school. Like you and I pairing uh, that, you know, it relies on longevity and people sticking around and being loyal, you know, to the company, which is kind of an old school mentality these days. But we've been able to find find people, even young Gen Zers that are, um, kind of bought into that concept. They really want a place they can grow roots and, and be here for the long haul. So the key is finding those individuals that are willing to perpetuate that model. So the first of all, um, got a couple of things here. Number one, I think you guys well, first of all, your engineers. So, um, you know, I, I have dealt with people that have dealt with you guys, you know, attorneys that kind of stuff. And, you know, the just the kind of the over 

Speaker 1

[00.11.26]

 writing compliment you guys get is, well, you know, they're engineers and everything is done right? Right. And most, most attorneys, like when they're talking about success because, you know, we're doing a lot of that succession stuff and trying to figure all that out in our company. And so, you know, they're like the attorneys I talked to are like, yeah, most people, right. This big long thing. And then, you know, they're supposed to revisit the value of the company every year or every five years. And guess what? They don't do shit for the next 20 years or until there's a problem, right? They don't do anything. He goes unless you're like pace engineering. And they do. They you know, they they do what you're supposed to do all the way along the process. So, um, you know, I think that you guys, uh, I mean, there might be a business model here, Paul, where you guys can, could roll out a book that says this is how you do it, and then. But you're probably going to need a second book saying, this is how you have the discipline to make everything everybody do what they're supposed to do. Because maybe all the engineers have that acumen to make sure it actually gets. You know, those valuations are dealt with at everything. So I mean it's a lot. I gotta imagine there's a lot 

Speaker 2

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 of back. 

Speaker 1

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 Um, back off. You know, uh, hey, make sure he's giving his shares up and then so-and-so is buying their shares. And I just seems like a lot to manage. And maybe, maybe it's kind of automatic at this point, but it just seems like a lot to manage behind the scenes. 

Speaker 2

[00.12.51]

 Yeah. You know, it. It's, um, it requires management. And our fiscal year ends the end of September. So. So we deal with it every September. And we've been doing it so long, and we've got the templates and spreadsheets and all that, that it's it's not a huge lift, really. And, uh, you know, it takes a few days in September, then we have an internal board meeting and kind of go through that. But, you know, the the really underlying concept for, for it to work is and I know you can appreciate this too is is just. You know, you have to have a really teamwork oriented culture. And, you know, we we win together. We lose together. You live and die together, and no individual is more important or bigger than than the team. And so we we share. We share profits as a team. We and that's, that's kind of different um, than say, you know, your example with the attorney model because even our corporate attorney says, oh my God, I don't share anything with anybody that I, you know, my one that's all mine. Mine, mine, mine, mine, mine. Right. And so, you know, that's why these these attorneys, you know, that their names are always changing on their titles and, and, uh, they, they can't stay together. So you gotta that culture, if without that culture, the the program doesn't work. And plus it takes pressure off people and, and, uh, you know, and you experience this too. I mean, sometimes you might have a project that, you know, you went in. It's very tight budget, maybe even under budget, maybe some things that, you know, maybe you took the job to keep your guys busy or set things you missed. But you've you've got to finish the job and you've got to do it right. And you've got to maintain that relationship with your client. And so you're going to put probably your A-Team on that job to minimize the bleeding and, you know, try to get through it. Well it does it's not fair to the to the A team to put them on a job like that when there isn't much upside to make any money for the company and then have them get penalized for it down, down the road. Right. And so meanwhile you put B and C team on the jobs that have plenty of money and you know, and they come through and for you. So it works just like that with us. You know we're putting our best people on the on the challenge you project and not maybe not always the most profitable projects just to maintain the relationship. The, the um. Reputation. And so you want to if you have that teamwork culture, you know, the team understands that they're taking one for the team, but they're not going to get hurt at the end of the day when it comes to sharing profits and that sort of thing. 

Speaker 1

[00.15.41]

 Yeah. Which is huge. Absolutely huge. Yeah. So and then and then like you said, we do it every September. So there has to be an innate trust. And then everybody that's doing it that you're going to follow through. I think that is what culture is all about. You can say here's our core values that are on the wall, but if you don't live by them and do it consistently, it doesn't mean anything. And people can see right through that. And they, you know, so I I've seen both sides of that. So okay. So next question is on this ownership structure. Is it reserved for your engineers and your licensed surveyors only or is it, you know receptionist. Is it I mean, how how broad does it go in your company? It's a good question. And we really call it a key employee. Program. So it isn't necessarily reserved for licensed professionals because we we have key individuals in our organization that aren't necessarily licensed professionals, but provide a very important service roles for us. And so, for example, uh, you know, our, our experience tech editor, our CFO, uh, office manager, we may have some really experienced field guys that do field inspections that have 20 or 30 years experience or it had, you know, those are all non-professional roles, at least compared to surveying and engineering that that are in our program. I see, so it's 

Speaker 2

[00.17.13]

 kind of yeah, the concept is, is that okay if the proverbial poop hits the fan and you've got to build your company with your shareholders and start, start over, what what does that shareholder make up need to be? 

Speaker 1

[00.17.29]

 Right, right. No. That makes that makes sense. So how many employees does. I don't need exact, but, um, I know you know how many employees you have, but roughly how many or what percentage of those employees are in the ownership structure, if you don't mind me asking that? 

Speaker 2

[00.17.45]

 Yeah, I think right now we've got about 85 on the payroll, including some, uh, students, uh, student interns that are getting ready to go back to school. Uh, and our ownership, I believe, is around early low 40s. So about half. Oh, wow. 

Speaker 1

[00.18.01]

 Holy cow. That's incredible. I thought the number I thought the number might be 30, you know, would be would be pretty large, but that's amazing. That is amazing. Paul. Okay. All right. So, um. All right, let's switch to Paul just a little bit. So, uh, did I read that you're from weed? Did you go to high school in weed, California, 

Speaker 2

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 buddy? I did, yeah. 

Speaker 1

[00.18.26]

 That's like going to fall River. That's, uh. I know I had to cross paths on the on the football field or baseball diamond. Perry. Yeah. 

Speaker 2

[00.18.35]

 What year did you graduate? Were 

Speaker 1

[00.18.36]

 you 89? I graduate 88, 88, 88. 

Speaker 2

[00.18.39]

 So you're a year behind me. I was 87. Okay. And. Okay. So. Yeah, you know, weed high school. My parents still live up there. In fact, we're getting ready to build them a house down here, uh, to get them closer to medical care and out of the mountains and snow and firewood and all that stuff. Um, so, yeah, I graduated from weed. I went to College of Siskiyou for two years and then transferred, uh, down to UC Davis. So no regrets whatsoever about any of that. Yeah, 

Speaker 1

[00.19.08]

 I think it's awesome where we grow up in these small towns. And, uh, yeah, I wouldn't trade it for anything either. So you said sports. What sports did you end up playing? Pool. 

Speaker 2

[00.19.18]

 Uh, football and baseball. Nice. 

Speaker 1

[00.19.22]

 Yeah. Okay. And then I remember your son was super into basketball. So you didn't play any basketball, but your kids were super into that. At least a couple of them were, I know. 

Speaker 2

[00.19.31]

 Yeah, yeah. Both my boys played basketball through high school. And, you know, I was kind of brokenhearted that they, uh, didn't like baseball and, uh, just didn't move enough for them and not enough stimulation, which I understood. But I was still heartbroken, and I couldn't dribble a basketball and chew gum at the same time. So somehow they got those pills from their mother or something. Yeah. Yeah. That's incredible. Okay. 

Speaker 1

[00.19.56]

 Yeah. So, um, what do you. I, you know, this is called the North State Rocks podcast. So, um, tell me about. I know you're a big outdoorsman, so what do you like to do when you're not 

Speaker 2

[00.20.09]

 working? Well, yep. I love to hunt and fish. Those are probably my my big passions. But, uh, you know, as I get older, I like to do just about any activity. And I don't care what it is with with my family and, uh, my wife and my two boys and, you know, their and their, their mid to late 20s now and developing their own paths. And so it's hard, harder and harder to get, get everybody together. But, uh, I live for those, those opportunities. And I know I've talked to you about it too. You're the same way with with your kids and wife and, uh, you know, camping. Um, I like to backpack. Um, you know, I've got got some property to take care of that I live on. That's, uh, probably I get older. That may be more of a burden, but, uh. No, it's all good. In fact, my youngest son is coming over from Reno this week, and we're going to try to shoot some doves Monday and Tuesday, uh, with some family. And so I'm looking forward to that. But, um, yeah, I'm not a real sophisticated guy, Perry. Yeah. You know, uh, 

Speaker 1

[00.21.21]

 obviously, I, I, I've known you for quite a while because we, our, our kids played in that basketball circle, and we're a traveling team together. And we got to spend a lot of time just not doing work stuff, which was awesome. And then of course, uh, gotten to know you more in a professional level in our, in our Vista group here in Redding. Um, that's been awesome. But I, you know, I get the in fact, Travis Carter and I were talking about you because I said, guess who I'm gonna have on the podcast today? And, you know, so Paul said Travis was super excited that he's like. And I'm like, how do you advice for me? And, uh, so one of the things that he talked about, which I think is, is good is that, um, we got to get Paul to talk about himself a little bit because you are the probably the most selfless person I've been around in the Victor's group. It's never. Hey, here are my problems. It's always, how can I help? In fact, we usually have to pull teeth to get you to even process any type of challenge that you're dealing with. And that's probably just because you're so much better than all, all of the rest of us, and managing and managing your team. I think that's what it's really about, Paul. But, uh, you're 

Speaker 2

[00.22.26]

 just so selfless and so, uh, professional and quiet and. And how can I help? Just so. Ready to jump in? And how can I assist in whatever challenge you're dealing with? And I've just always really, really appreciated that about you. So thank you for being that guys. So that's why I'm, I'm kind of asking more about your personal stuff and, and your kids. Uh, but I, I want to follow that up with a stat that I heard that really is about half depressing. But it was a kind of a really a great alignment thing for me. Um, I heard it a few years ago and it was, um, basically, I'm probably going to butcher it, but roughly the premise is you have 19 years with your kids, one, you know, zero through 18, they're with you. And then for the rest of your life, you have approximately one year of total time that you get to spend with them. And holy cow, you want to talk about hit you over the head with a frying pan moment of just clarity. And so ever since I heard that a few years ago, I'm I'm like, that's not going to be one year. I'm going to try and make that ten years or whatever, whatever that is, I'm just going to try and blow that out of the water. And of course, you know, a lot of people define what is success. And and I'll tell you for, for me and I know it's for you too, but, um, six I define my wife and I define success, as, you know, do your adult kids. Choose 

Speaker 1

[00.23.54]

 to spend time with you, right? And if the answer is yes, then in my and my mind, you've succeeded, right? That's that's what that's the true definition of success. And of course, we don't have any kids married yet. Have one engaged, don't have any grandkids yet, but it couldn't. Or all of that perpetuates once once, you know. But it all starts with them choosing to want to spend time with you. So I think you guys have done an amazing job of that. Can you kind of reflect on that a little bit for me? 

Speaker 2

[00.24.24]

 Yeah, you and I are 100% in line, Perry. Without it. You know, another statistic that I've heard that kind of relates to what you said that is eye opening, is they claim that that you'll spend 80% of your time with your children and your life before they're 12 years old. 

Speaker 1

[00.24.46]

 Yeah. That's another, that's 

Speaker 2

[00.24.48]

 another. Yeah. 

Speaker 1

[00.24.50]

 So gutting one. Yeah. 

Speaker 2

[00.24.52]

 As I've, as I've gotten older, my kids have, you know, moved out of the house and I have all these young employees with young families and young kids, and I see the stresses from the job and, and, and being a husband or wife and, and all the stress that comes with that. And I just, I spend a lot of my time just counseling them, just saying, hey, you've this, this is the best time of your life. And. You know, there's nothing more important in these four walls of work that takes the place of what you have at home. And you know, you do whatever you take. You never miss an event, a ball game. You know, anything. And I just I emphasize that because I, I don't have any regrets, obviously, but you just, you know, like you to I'm sure when the kids were young and and you were, you know, build the company and trying to get your feet on the ground and you know that that was a big focus of your life. And, yeah, you know, my life, uh, is funny. Um, my youngest son brought his, um, his new girlfriend up, up to Redding a few weeks ago. And, um, and so Julie was showing videos of the kids growing up and, you know, VHS stuff. And Perry, there was stuff on there that I'd never seen. Really. And. Yeah. Yeah. And just, you know, fortunately, you know, Julie stayed home with, with the boys and she had a camera going all the time. And I remember at the time thinking, oh my gosh, what are you doing that for? It's, you know, better. You know, I just I didn't appreciate that. And now I sit back and I, and I see these videos and go, oh my gosh, I'm so thankful that that she took the time out. And um, but now you're absolutely right that that's how I, I view success. There's nothing, you know, when we're, when we're gone and away from our organizations, if we've done our job, they're gonna they're gonna flourish and and they're gonna move past us. And as the years go on, they they won't even know our names. And, uh, so, you know, at some point when we're on our deathbeds, what's what are you going to regret? Nobody ever regrets that they didn't spend enough time at the office. So, um. I think you and I are two peas in a pod, Perry. When it comes to that philosophy, and I think that's how we try to lead our organizations. And one of the things I really appreciate about Vintage and Martin Flack especially is, you know, he's really a big proponent on servant leadership. And, uh, that fits well with my, my personality of, hey, I'm here to serve you guys whatever you need me to do, want me to do, I'm here for you. And I think that's a important leadership trait. Yeah, 100%. Yeah. Really? Really. Well said. So let's just kind of let's kind of pivot back to that. So I've always, um, you know, I've been around your team. Um, we've done it's been quite a few years, but we've done some projects with your team, but um, more around, you know, um, events and reading and things where I get to interact with your people and, you know, always, always super positive. Always. Uh, how can we help? How can we roll up our sleeves? And just also always super grateful about whether you're investing to have them come to, you know, a, um, a speaker so they can expand, you know, their career growth and their knowledge. It always seems that they have just a ton of gratitude for that and just have just great attitude. So, um, and I know just being around you and being around your team, how great the culture is at, at pace. So what do you attribute, you know, what do you in your mind, as you know, the leader of that organization for the last 17 years, how do you you know, Bruce Dean is famously told us, you know, CEO's got one job and that is to protect your culture, right? Well, you got to have a culture worth protecting, number one. Uh, but then once you have it, protecting does number two. But what do you what do you contribute? What makes the culture so great at pace? And then what what do you and your team actively do to protect that? Yeah. Great question. You know, I think I think the culture was started with our, our founders and, uh, you know, it's it's heavy on family, heavy on teamwork, heavy on integrity and work life balance and, uh, that I mean, that that's the first thing I saw as a 20 year old kid the first two weeks I worked here and was like, oh my gosh, this is amazing. So, you know, they started it. And, you know, we've just tried to really perpetuate that and um, try to give, you know, give people autonomy, give them support. Um, you know, focus on what's right, not who's right. Um, and, you know, just give your best effort. Nobody's perfect. We all strive for perfection, but it's not attainable. So excellence is acceptable. Um, and, you know, another thing to Perry is, is our our company is our all local. All local individuals that went through local schools. And, you know, I think we try to hire college graduates. There's a lot of talent from the North State that gets away from us. And, you know, they the kids, they go to small schools like fall River and Weed and Burnie and and even the bigger high schools around Redding and and they're very, very smart. And they, they move out of the area and never to be seen again. And so we're, we're trying to build our company with, with those that, that are in that talent pool that, that maybe want to come back. And you know, they have family roots here. Maybe they have a spouse that has roots here and they want to raise their kids in a in Northern California, which I think is the best place on Earth. And, um, and so, you know, we're looking for those kind of individuals and, and they, they really appreciate being here, being able to, to work in a community that they grew up in and loved. And so that's got to transcend to some extent to. Just a real positive outlook, positive attitude. And you know, that comes across to their personal interactions as well as the business interactions. And and that's what people see. And uh, so I, I don't know what the magic marker magic bullet is. Um, like I say, the culture was started before I got here, and we've just tried to live by those core values. You know, we talk a lot about core values. And, you know, there's one thing to post them up and say, yeah, those are our core values. But you have to you have to live by them. And I think I think we we do that. I think our entire management team and our senior leaders sincerely try to live by those core values. And, uh, it's even though we, we feel like we're a, um, you know, a high performing company, I will tell anybody that, you know, there's nothing more important than what's going on in your personal life. And, uh, there's nothing there's nothing in these walls that trump that. I don't care what the situation is. So, um. Yeah, I. I was afraid you were going to ask me that, and I hope I have a better answer. I 

Speaker 1

[00.32.41]

 thought that was a great answer. I thought that was a spectacular answer. You did an excellent job. Okay, so now I want to challenge you with, um, you know, as, as, um, leaders, right? We have, um, it's not always. Hey, uh, every team member is aligned with our core values and our culture, right? So we're going to always have a small, you know, handful or what have you of problematic, you know, team members. So I'm just kind of curious how, you know, you're saying, hey, we've got to live the core values. Have you guys had instances in your, in your tenure as the last 17 years where you're like, hey, we had to move somebody off the team and and just talk about that a little bit because, I mean, uh, so I will say that I 100% agree family trumps everything. And I think a huge component of why you guys are so successful is just why the firm was started in the first place. Like, we don't want to be traveling to India to work on a sewage treatment thing over there. We want to be in ready. We want to come home every night. We want to see our family. That was kind of the the impetus for the the firm being created in the first place. And then you guys have done a great job of just keeping that family feel. But we also know that sometimes, um, a lot of a good thing creates complacency and almost entitlement. And, you know, hey, my I'm going to think of a good example, but something work is also important. So how we have to make we have to be profitable at the end of the year in order to do all this. There's some there's a lot of these or these customers have tremendous demands. How are you walking that balance? And then specifically when it when it gets to the point where you're dealing with a really problematic employee that maybe you have to part ways with, how much have you dealt with that? And how does your you and your team deal with that? 

Speaker 2

[00.34.42]

 Yeah, well, we're not immune to it. Perry is, as you know, I don't think anybody is. And, of course, as we grow to, um, you know, 1 or 2 of those situation situations can really consume you. But I think I've learned over the years, too, that I don't think we want to apologize for who we are. And we have we have a bus going one direction and there's a seat on the bus for you going that direction. But but the direction has already been established. And if that doesn't work for you, then there's no seat on the bus for you. And, um, you know, and it's hard. It's been hard in recent years, especially as, you know, we've gone through all this cancel culture stuff and, and, you know, hurting people's feelings and, you know, and you can really drive yourself nuts trying to accommodate everybody and trying to not offend anybody. But at the end of the day, You have to stick with what got you here and what you believe in. And so we have had situations where, you know, individuals, they just weren't a good fit. You know, we are who we are. We're not going to apologize for it. And so we have to, you know, part ways and, and that uh, is usually, uh, you know, usually a termination. But, but, you know, we often pay a, you know, multiple week severance and, you know, we don't want to hurt somebody, right? We want to give them an opportunity to succeed, maybe in a different venue that's better suited for them. And, um, but, you know, um, we we do have those situations. Um, but it if you're not careful, you can you can become who you don't want to be if you don't believe in who you are. 

Speaker 1

[00.36.33]

 100%, 100%. Yeah. That's so well said. And I think that's such a critical part to protecting the culture is unfortunately doing the dirty work of saying, and you said it and you said it, right. And it's absolutely true. Just because someone is not a core value fit in your organization doesn't mean that they won't be a fantastic core value fit in another organization, right? And so it's just it's an alignment issue. It's not us saying that, hey, you're a bad person or whatever. It's just saying this is the way our company is going. You're not on board with that. That's okay. But to protect our team and protect this culture, we need to make you off the bus. Because our bus is going this way. And I thought you did a great job of kind of explaining that. Um, you know, I was just I do a lot of driving in my job. And there was I was listening to an incredible podcast with, um, it had the, uh, CEO of Coinbase, which is a, you know, a crypto, um, Bitcoin, um, and I man, I got the guy was incredible. But he was talking about, you know. Um, kind of through Covid. And, you know, he was the he had a about 30% of his employees kind of built this big thing about, um, we're trying to make politics in business, right? And they wanted the company to make this big stand about, you know, we're with BLM is around the George Floyd stuff and all that stuff. And and to the guy's credit, I mean, he was pretty young at the time. He was like, he was like, man, I was just busy working. I was not keeping up with, you know, what was going on, politics. I mean, I was working, you know, 18 hours a day and barely getting any sleep and just trying to keep the company functioning. And they wanted to turn this into this big political thing. And, and at the time, it was super controversial. But he was one of the very first huge, huge businesses that said, look, we're going to keep the main thing, the main thing, and we're going to do what we do, and that is trying to make, um, bitcoin and crypto. And you know, this basically think that we have this flawed financial system that we're trying to perfect. Perfect. Which is a good thing for humanity if we if we get it right. And we're going to keep focusing on what's good for humanity. And I think if we bring that back to our kind of our north state roots. Right. And just saying, hey, we're going to continue to do what we think is best for our team and therefore our community and therefore our region. Um, that's where we need to focus our attentions as as leaders of people. Right. And so anyway, I just thought that guy that young at that time, uh, guy did an amazing job of kind of describing, you know, that. And it's so aligned with, I know what you do and kind of what we do. I just thought it was worth mentioning. 

Speaker 2

[00.39.29]

 Yeah, it's that's an important point, Perry. And and, uh, you know, especially with our, our kids, you know, our our Gen Z kids. It's very important that they they enter into a work environment where they feel like they make a positive difference on society, on humanity. Of course, that's easy in your business. It's it's pretty easy in our business, too. But it's very exciting for these young people to come out of college and say, oh, wow, we're you know, we're replacing a municipal drinking water for a small, disadvantaged community in Northeast California kind of thing. And, uh, helping those communities with, with those kinds of projects. That's very, very important. I don't know that you're in my generation, uh, appreciated that to the extent when we were younger men, but, um, the, the current younger generation definitely does. And I think we've all, you know, us older guys and gals have kind of evolved to that thinking as well. So it is it is very important. And and we do a we do a very good job, I think of kind of keeping politics out of. Out of our walls of discussion. I mean, you can, by our core values, probably estimate, you know, what side of the spectrum our company leans as a whole. But we we we represent everybody here. And I think the nice thing, everybody's very respectful of people's perception. We don't talk a lot of politics within our walls here because that's not our mission. Um, but yeah, that's that can be. Especially these days is divided as the country is and it can go down a rabbit hole quick if you're not careful. Yeah. Absolutely. Absolutely. It just gets back to you're either core value fit or you're not. And nowhere in our in our core values does it say, you know, what political affiliation you need to be associated with and your organization the same way it leans it leans one direction, there's no doubt. But, um, you know, one of the things that we always talk about is also not having blind spots, right? You just, um, you can't be all a bunch of ditto heads and and have massive blind spots. So I really appreciate those people in our organization that kind of give us a unique perspective. I'm not just talking politically, I'm just talking about just, you know, you have leanings in every organization and those people that are willing to stand up and go, wait a minute. Um, uh, have we thought about this? You know, and those are super valuable. So. Okay, I wanted to pivot one more time to we just brushed on Covid and a whole nother thing. But can you tell us a little bit about. Building a brand new, massive office at Stillwater Business Park. If they think you were one of the first to go to go out there, and it has been teed up and ready for. You know, I don't know how long before you guys went and just navigating that on top of just a it's it's not super cheap to build anything from the ground up anymore and be, you know, um, now let's go ahead and do it. During Covid, when fear was just spiked and, uh, everybody was running for the hills. 

Speaker 1

[00.42.46]

 Uh, Paul and his management team says, hey, let's go spend millions and millions of dollars and go build a brand new office. Can you just let's 

Speaker 2

[00.42.54]

 share that with our audience a little bit, because I know I'm sure you were just super confident through that whole process and just certain that you were making all the right decisions at the time. So just just 

Speaker 1

[00.43.05]

 reflect back on that for us, 

Speaker 2

[00.43.06]

 please. Yeah, that that was a challenging time especially, you know, the the traditional brick and mortar companies were selling their real estate assets and moving everybody to remote or acquiring a building half the size that they had because they didn't need the space. And here we are wanting to more than double the size of the space we had before. The. The one thing that kind of swayed the decision is we're currently in the midst of some really key retirements, um, at pace. And, uh, back then around Covid time, there was, uh, we had forecast that within about a 6 to 8 year period, we needed to turn over about two thirds of our ownership through retirements. Huge. 

Speaker 1

[00.43.58]

 And how much time did you need to turn over that? Two 

Speaker 2

[00.44.01]

 thirds? About 6 to 8 years. 

Speaker 1

[00.44.03]

 Wow. And, uh, so when you when you start thinking about that, and, of course, you know, we're retiring men and women with 30 plus years experience, you don't replace those with an entry level, you know, college graduate. And so we knew that we needed to add resources and staff and start the mentoring and training with these senior leaders while they were still here in order to prepare for this retirement bubble. And we frankly, didn't have the room to add the resources we needed to prepare for these retirements. So the big thing for me was is that, you know, if we don't build this building, we have no good transition plan to get us through the retirements. And at least if we do build it, we have a chance. Right? Right. 

Speaker 2

[00.45.01]

 And so it really came. It was that simple period. And and you know, when we, we had a contract with a contractor to build it and between the time we got approvals through permits and started acquiring materials, you know, just the lumber package for the building had increased like 40%. And, um, and, you know, but if you, if we would have started a year later, that same lumber package would have been 250% more. So you could argue that, you know, maybe, you know, we we we're kind of on that front. And then I know I've shared this story before with our vintage group, but, you know, we we had built in what we thought was a 10 to 12, maybe even 15 year growth in the building with, you know, vacant space and offices, etc.. Well, as soon as the building project became imminent, we started hiring people and we were doubling up offices and putting people in closets on our Court Street building because we knew we had this to move into. So when we moved in, we had consumed about half of that surplus store or room that we thought we had. And then within 18 months, we'd filled the building up. So, you know, we got a new building 18 months old, and we're bursting at the seams and it's like, oh my gosh, are we going to have to do an addition now? So, um, we're still navigating that a little bit, but we have gotten a little more creative with use of our workspace. And, um, I think an addition is imminent. And the challenge now is trying not to time that with the peak of this retirement bubble to minimize the, you know, the overall debt to the company. So, uh, we're hoping to push it off a few years. But yeah, that was um, that was a challenging decision to make. But again, it really for me, it was if if we don't do it, we don't have a chance to get it. You know, you said it's such a I mean, uh, you're saying it's such a simple it was a it was a simple decision because it came down to that. But but again, that that comes to. There is so much fear that was happening then. And so to really say, hey, we're going to lead with faith and not with fear. Uh, and is is pretty remarkable. And then, I mean, engineers are are classic over thinkers, right. And so you have you guys have a 

Speaker 1

[00.47.23]

 staff filled with over thinkers and just a, you know, a lot of us have lived through that Covid thing and, and haven't forgotten how much fear there was. I mean, there was, uh, I, I, I still remember just, I mean, my office just going, you know, uh, apeshit probably is a little too extreme, but very concerned about do we even, you know, Gavin Newsom on the thing saying the state is lockdown, nobody goes to work. And then our my people are like, oh, are we going to work? Are we not going to work? What do you want us to do? We we were not set up to work from home at all. Right. And I'm like, the hell no. We are showing up to work and I don't care what anybody on the damn news is saying. We've got work to do. And so anyway. But I. So it's you. I love how you. I mean, it's very typical, Paul. It was a very simple decision. It was not a simple decision. So I know you guys eventually got there, but was like everybody in your office. I mean, I know you guys are really good at kind of breaking things down and pros and cons and this is, you know, and and leading with logic. Right. I think that's what a lot of people are not great at is they lead with emotions and not with logic. So that is one great thing about an engineer as you guys go, look, we've got all these retirements coming. They're all going to hit in the next 68 years. If we don't have the space, we physically can't do it a court street. So even if we don't choose to build out of Stillwater, um, we've got to like add on to Court Street, which it's old building. There's a lot of limitations there. We got to find another building that we can go rent or we can start. We have this office and we rent another office. It had to be a lot of discussions about how maybe we just rent a second office, and we have part of our staff there. What made you go? Yes, we're moving forward and going to go spend several million dollars building a new office. 

Speaker 2

[00.49.22]

 Yeah. You know, we we did consider, you know, leasing or acquiring offsite space and. That was not very well received from the company. And, you know, from from the top to the bottom. Everybody likes being together. They like being under one roof. That's kind of our culture, our teamwork kind of culture. And they just felt that it would it would impact our culture too much to split the company up from a financial perspective. That probably would have been the right decision, you know, but at the expense of what? Right. And if our job is to protect culture at all cost, then that was probably a pretty expensive, um, approach to take. So we decided if whatever we do, we're going to do it such that we could be under one roof. And, um, and, you know, for better or worse, you know, we knew we knew the numbers. We had good costs from contractors. We knew what it would cost. We we we felt good that we could afford it. But that was all based on whether the same work opportunities were going to continue after Covid, which nobody knew what was going to happen there. So that was there was a little bit of leap of faith there. So, you know, I, I know I've talked to you, I've talked to Bruce Dean and others and visited you. You know, our job is to try to look into the future and make decisions. And who can do that? You know, if we could do that, we wouldn't be sitting here talking. Probably. But I've always leaned back to if the past is any reasonable indication of the future. I think we're going to be okay. Yeah, I think I think there's going to be work. I don't I don't think, you know, the end of Covid, the work is just going to stop and or the work opportunities or the money that they're funneling into infrastructure. Obviously, if that would have happened, uh, you know, we probably wouldn't be here. But, um, the workflow continued. And I felt good that if, if that, if it did that, you know, we'd be able to afford it and, um, and, and get by. So yeah, there was some, there was some, there was a lot of spreadsheet work and, uh, you know what ifs? You know, what's the worst case scenario here? If our business dropped 10%, can we make this mortgage payment or can we still pay out dividends to shareholders? Can we? You know, we work through a lot of scenarios that I don't know if I think we would have considered worst case scenarios based on our history, but Covid was unprecedented. I mean, that was probably one of the most stressful times as a leader that I've ever experienced because there was no playbook, there was no protocol. And, you know, you're just making decisions day by day on the seat of your pants with conflicting information and trying to keep your organization at a, a level that, you know, they trust you. And, uh, that was that was not fun. And I have a lot of respect for all the leaders during that time, even those that are still getting chastised for it. It's like, you know, it's easy to chastise a leader, but if you haven't been in that position trying to make those decisions during those circumstances, you're not entitled of an opinion, in my humble opinion. 

Speaker 1

[00.52.42]

 Yeah, yeah. No, I, I couldn't agree more. So. Well said. Yeah. So, um, okay. Can you also now, um, kind of take us through 17 years ago when you kind of took over the helm, how many engineers did you guys have? Kind of roughly the total employees. And then, um, you know, where you guys are or where you were in revenues kind of in the beginning and then kind of what trends you've been seeing in your revenues the last few years? Um, can you share that with us if it's not too personal? Sure. Yeah. I, I think in 2008 ish, I think our, you know, we, we judge it based on kind of our gross revenue. And, uh, I think at that time we were about around 6 million, I think, as a company. And I think we had about 30, 30 to 35 total employees. And um, and currently we're. About 85 employees. And I think this year I think we're going to hit about 24, 25 million in gross revenues. Uh, through that time, we we added an instrumentation and controls division, uh, mechanical division. So we got a little more broad with the services. We could, we could provide which which has enabled us to get involved in, you know, larger multi-discipline projects that require all those engineering disciplines. So, you know, large commercial buildings, institutional buildings, uh, that sort of thing. So we've, you know, we've we've gotten developed a few more capabilities, um, during that time. And it's really been, um, relatively organic growth. The one thing that gave us a big growth burst was, uh, you know, coming out of Covid and, uh, you know, the state shut down for years, so they weren't providing any services. Meanwhile, the rest of us are paying taxes. So the state had a ton of money. And, you know, we had several applications in for public works projects in the coffer. And the state was calling us up saying, hey, you've got a $5 million project. Uh. In here. Can you increase that? We need to spend more money. I was like, oh, really? Okay. So yeah. So there was a there was a period there about three years, if you will, that where the state was really trying to roll out that infrastructure money. And, uh, we were kind of right in the middle of it. And, you know, that's when we were adding staff like crazy and, and trying to, you know, power up to be able to do that work. Well, it's since normalized and gone come back down to earth. It doesn't take long to spend, you know, those those reserve monies, but it's it's a more normal, uh, what I'm used to now, which is more a lot more competitive projects aren't as big in terms of dollar amounts. And, um, you know, they're not they're not coming in like they were, you know, the first 2 or 3 years after Covid. So the future is, you know, there's some uncertainty there. There's still, you know, we're still trying to figure out, you know, what the ultimate impacts are going to be from some of the economic policy decisions that we're doing now with tariffs and that sort of thing. And, you know, it's just kind of it's it's very, uh, somewhat volatile. But, um, I just I come back to maintain that, you know, services like roads and bridges and water systems and wastewater systems and schools and hospitals and, you know, those kinds of things that that we need as basic services to function, you know, until they just pull funding from all that, I gotta believe there's going to be work opportunities out there for, you know, Hat Creek Construction and Pace Engineering. So. Can't 

Speaker 2

[00.56.41]

 predict it. But yeah, I 

Speaker 1

[00.56.46]

 completely agree. Yeah, I completely agree. And that's, uh, you know, you said it earlier, but there's a there's a quote. I can't remember who did it, but, um, somebody famous like a president, but it was like the further, the further you look back, the farther forward you could see. Right? So basically, really pay attention to your history, pay attention to, you know, trends that have happened over the last 30 years in your industry. And then, you know, you kind of be looking at that moving forward. And we all know that these industries do do this. Right. But but in general, it's still a slow climb over time if you can, if you can manage through the ups and the downs and that's as leaders, that's that's what we get paid to do. Right? So we get paid to do. 

Speaker 2

[00.57.28]

 Yeah, exactly. Yeah. I was just I was thinking as you were talking there for a moment ago, thinking about how during Covid, because we had talked about that, how you and I were kind of texting back and forth about, are you having a Christmas party? Yeah. You know, it's I mean, just just the crazy things that, you know, we're trying to get some feedback because, you know, I was talking to everybody. I'm like, no, we're not doing anything. And I'm like, you know, our our team was so hungry. They're they're our team is very much like your team. We're you know we have multi offices now and we're kind of getting to the point where we're starting to navigate that. But um, you know we've always been under kind of a one roof type of company and everybody knows each other really well. And a lot of our friends are in the business and we do things outside of business together as friends. And, uh, you know, we have our, our Intermountain fairs this weekend and this is the, you know, this is when you see everybody for, you know, the one time of year you get to run into everybody and have a beer and get to catch up on stuff. And, uh, there's just a lot of connected togetherness. And I just remember, uh, you know, we canceled a couple of, uh, Christmas parties, and I really regretted that later on. And then as kind of a reaction to that, uh, to make it non, you know, because at the time, I mean, it's hard for people to think in hindsight, it was so. So clear, but in the time it was so muddy and so murky and there was so much potential liability that, you know, hey, we have to have a Christmas party. And then Johnny goes home and visits with, you know, 85 year old grandma and got Covid at your super spreader event. And he goes and kills grandma. I mean, who wants to. Who wants that on the on their conscience? I mean, nobody nobody wants that. And so anyway, I remember my wife and I, and my wife was like, f this we are going to have you're turning 50 and I'm not a guy that I'm very much like you. I'm not a spotlight guy. Uh, my business partner's wife. So Weston's wife Lauren has her, and my birthday was one day apart, so we had a joint. She was turning 40. I was turning 50. We had a joint birthday party at my house. And it was one of those things where you just kind of invited maybe, I don't know, um, 50 people. Right? And, oh, 

Speaker 1

[00.59.50]

 it was outside, but it was it was one of those things where it was the middle of summer, so it was good weather. I'll bet you we had 200 people there. It was freaking real. And it was so much fun. And it was exactly what everybody needed, because everybody was just like, I'm just sick of this. I just, I miss people. I want to be around people, you know, and I'll take the risks. I'm a big person. It was something where like, it's not a company sanctioned event, it's the company can't be. It's a personal thing. If you want to be mad at Perry later on or whatever, that's that's one thing. But you're not going to you're not going to be blaming us corporately for for it. And so anyway, I just was thinking about how you were back and forth. And to your credit, I think you guys had you think you had, um, at least one of those during the time where you had your Christmas party anyway. Right? 

Speaker 2

[01.00.38]

 We did. Yeah, I think I think we canceled one and we had we had one. We got to the same point, Perry. And it's like, you know, and then as a leader, when you start getting down to the end of it, you start feeling like you were duped, you know? 

Speaker 1

[01.00.54]

 And so bad, I know. So. 

Speaker 2

[01.00.57]

 But at the time, you know, I went. We had all the same emotions. And, you know, you're trying to listen to the CDC, you're listening to the governor, you're trying 

Speaker 1

[01.01.04]

 to listen, you know, 

Speaker 2

[01.01.06]

 the the wow. And, and and you know, everybody has their guidelines and and, you know, you have a big organization too. And and, you know, all you need is that one individual in your organization that says, oh, you didn't follow the guidelines. And it led to this and what's alive. Nobody's going to stay with that. Nobody had navigated that. So nobody had navigated that. Yeah, but you couldn't evaluate risk. And um, but yeah, you know, the thing that really that kind of sent me and it happened right towards the end when the state came down and said they were going to mandate employers to track the vaccination status of their employees. And that's when I said, up till then, I was trying to be a good scout. I tried to comply, but at that one I said, I am not doing that. You. You take me to jail, I will go to jail. But I am not going to do that. And, um, it was like three weeks later they lifted everything. But I was thinking, you know, you're gonna you're gonna impose that requirement on private employees to do the job of a state agency, 

Speaker 1

[01.02.08]

 right? And make me the bad 

Speaker 2

[01.02.10]

 guy. Come on. 

Speaker 1

[01.02.11]

 Yeah, 100%. I know, I know, yeah, well, okay, so we're wrapping up, but here I'm going to end it with, uh, right North State rock. So tell me, what is your favorite thing to do in the North State? I know hunting and fishing, but is there a specific place? And so give me a couple things, like where do your where's your favorite restaurant, you and your wife go and the wedding or actually, does it have to be ready in the North state? Um, and then, you know, when you what's your favorite place to take new people when they visit. You haven't been to the area? Give me a couple of those things of what people should do here in the North State. 

Speaker 2

[01.02.47]

 Yeah, well, I love Shasta Lake. I, uh, have a family of bass fishermen, and, uh, we do a lot, of, lot of bass fishing on Shasta Lake throughout the year, especially the winter and spring months. Uh, so that's that's definitely a favorite. But the thing I love about reading is, you know, you can go three directions for directions and be and completely different, you know, geographically unique areas. I mean, in 2.5 hours, you can be on the coast in the Pacific Ocean, one of the most beautiful coasts along the whole Pacific coast, basically north. You got Mount Shasta area. Uh, we'd of course Dunsmuir. I love the upper Sacramento River fishing up there. I, I like the desert, too. 

Speaker 1

[01.03.31]

 You know, you head east or towards fall River and, uh, and through Big Valley and get up into Devil's Garden area. I'd love to hunt and fool around up there. And then, of course, you know, you get to Alturas, and Nevada is very unique. You got the Warner Mountain range there and then let the play around in that country. Um, and then I, you know, I had duck blinds down in the valley for years down south of Willows. And I just, I love there's not a better place on earth for the things that I like to do than this hub in, in Northern California. And, uh, you know, when it comes to restaurants, um, I don't know if I have a favorite. It really depends on the mood, But, uh, you know, I'm a big fan of Jack's Cattleman's, I like steak. Uh, I also like Mexican food. I like Casa Ramos and Casa Rios here in Redding. Um, I don't like the little Mexican food restaurant there, and, uh, fall River Mills when I'm up there working. That's. That's a definite spot. 

Speaker 2

[01.04.29]

 Yeah. Um, but, uh, yeah, it's, uh, you know, I don't I don't need much to be 

Speaker 1

[01.04.35]

 satisfied. Awesome. Awesome. Well, Paul, I just want to thank you so much for your time on the podcast today. You did awesome. It was incredible. Thank you so much for sharing some time with us. And, uh, I guess I get to see you in just a few days at our Vista meeting. So looking forward to that too. Yeah, yeah. And I think, uh, I might be dove hunting with my son. That. 

Speaker 2

[01.05.01]

 He's coming 

Speaker 1

[01.05.01]

 over. Listen, only because it's your son, am I going to let you out of that? Because we just talked about family, so. All right, I'm going to let you I'm going to let you have that one, Paul. So it's going to be a work thing. I'm like, nope, nope. You gotta come. 

Speaker 2

[01.05.15]

 You gotta work. Okay. Yeah, 

Speaker 1

[01.05.17]

 yeah. All right, all right. Well, anyway, thanks again for your time, buddy.

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