Citing a tough "business climate" and a "dysfunctional" state Legislature, the largest publicly traded company in the Sacramento area said it may relocate to Texas.
Ron Mittelstaedt, chairman and CEO of Folsom-based Waste Connections Inc., said Wednesday his company has been negotiating with Texas officials to relocate the company's headquarters to Houston, Woodlands or Austin.
Mittelstaedt said Waste Connections' Folsom office employs about 200 people.
"This is the worst state in the country to do business in," said Mittelstaedt, who noted the company has not yet made a final decision to relocate. "There doesn't seem be be any improvement on the horizon."
The potential move has to do a lot with the Legislature's handling of a bill that affects California's waste management industry, Mittelstaedt said.
Assembly Bill 1178 would make it easier for cities and counties to export their garbage to other cities and counties.
On Wednesday, the Senate Environmental Quality Committee held the measure at the request of its author, Assemblywoman Fiona Ma, D-San Francisco. She noted that the bill did not have the necessary votes to get out of the committee.
Founded in 1997, Waste Connections is the largest publicly traded company in the Sacramento area, with a market capitalization of about $3.91 billion.
With operations in 30 states, it's also one of the fastest growing local companies, posting record revenue of $1.32 billion in 2010.
Mittelstaedt said talks with Texas officials have been ongoing "for a while now" and that the state is offering incentives that could reduce the company's sales and property taxes as well as relocation assistance.
By contrast, California lawmakers are "shoving businesses out," Mittelstaedt said.
For Waste Connections, the demise of AB 1178 would make it difficult for the company to expand its Potrero Hills landfill in Solano County, placing its $100 million investment in the landfill at risk.
The bill would have allowed Waste Connections to get around a voter-approved initiative known as Measure E that caps garbage imports to Solano County landfills at 95,000 tons per year.
That initiative had not been enforced until recently, allowing waste haulers to greatly exceed those limits. Last year, Waste Connections imported about 500,000 tons of garbage to its Potrero Hills dump.
Mittelstaedt said the company plans to work with lawmakers to pass the bill next session, but failure to do so could force the company to leave.
Kelly Smith, attorney for an environmental group that opposed the bill and Waste Connections' Solano County expansion, said he hopes the company's potential exit would result in new landfill owners who are more willing to work with the local community. "I don't think anybody is going to miss a couple of accountants in Folsom," said Smith, who represents Sustainability, Parks, Recycling and Wildlife Legal Defense Fund.
Mittelstaedt first made his comments Wednesday on the John McGinness radio show on KFBK.
On the show, he estimated his company's economic impact to the local region – including sales taxes, property taxes, income taxes and charitable giving – at more than $100 million.
Radio host McGinness, the former Sacramento County sheriff, said on the show that AB 1178's holdup was largely the work of Senate President Pro Tem Darrell Steinberg, which earned a quick retort from Steinberg's spokesman Mark Hedlund.
Steinberg, D-Sacramento, "hasn't taken a position on the bill, nor is he making any attempt to kill the bill," Hedlund said.
"One thing is clear – the senator doesn't appreciate it when wealthy interests use bully tactics to avoid the legitimate review procedures of the Senate."
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