Anaheim’s resort bus operator, which links millions of travelers yearly from their hotels to Disneyland and other points of interest, has 90 days to figure out how it will address pressing financial challenges.
The Anaheim Transportation Network’s new budget, approved by its board this week, sets funding for the next three months and relies on getting money from a tourism transportation fund it does not have control over. The agency has hit a crossroads brought by sharply rising labor costs and little ability to raise sufficient revenue on its own.
“If you look across the board, every transit agency is at a fiscal cliff,” ATN CEO Diana Kotler said at Wednesday’s board meeting.
Heading into its new fiscal year, ATN’s expenses outweigh revenues by $2.8 million.
ATN’s board of directors, made up of mostly hoteliers and other resort stakeholders, had several budget options presented to them that included laying off dozens of bus operators and slashing service to maintain operations.
Instead of moving forward with any layoffs or service cuts, the board voted to approve a 90-day budget that relies on getting $712,000, plus much of what it is behind in paying to its bus contractor, Parking Company of America, from the Anaheim Tourism Improvement District’s Transportation Committee.
“If we don’t get ATID funding ASAP … We will immediately run into a cash-flow issue within a month,” said interim chair Matthew Hicks.
But, the stopgap funding from the tourism district’s transportation committee has not been approved by its three-member board and no meeting has been agendized.
The transportation fund is overseen by a city staff member, a Disney official and a local hotelier and has provided millions in the past few years to ATN. The transportation fund has around $35 million in the bank that the committee has been stockpiling for the last several years to build a pedestrian bridge in the resort area.
Since 2020, ATN’s labor costs have gone up by 60%. It expects its unionized bus operators to start earning $26 an hour after a new labor contract is negotiated at the end of the year.
The agency sees revenue from fares, hotels that pay into the system and a key route it operates for Disney moving visitors from the Toy Story Parking Lot to the theme parks’ gates.
Drastically increasing what hotels pay into ATN would cause many that are not required to have a shuttle service to leave and further threaten federal assistance funding that’s based on ridership, Kotler said.
Board member Ronald Kim said the hotel community feels they are maxed out on what they are assessed to pay into ATN.
One option to balance the budget the board considered was laying off 43 union positions and cutting service by 30%.
The city, which is currently evaluating taking some level of control over the transit provider, recommended that service be cut by 24%, according to a staff report.
Al Burgess, a representative of Teamsters 952, which ATN’s bus operators are a part of, told the board that any proposal that includes layoffs would not get their support “when other budget solutions remain available.”
“Operators are not disposable,” Burgess said. “They are essential.”
Parking Company of America executives at the meeting said ATN is several months behind paying its bills and pleaded for the board and the city to work together on a sustainable path forward.
“While we understand the constraints ATN faces, we are equally deeply concerned that the city, despite having access to the financial capacity, has not stepped forward with the support needed to sustain current service levels and is seemingly content with our employees, Teamsters members, losing their jobs up to a ceiling of 24%,” said Parking Company of America Vice President Aaron Chaves.
“It is unjust to expect the agency as a whole to manage continued growing service demands without support and resources necessary to do so,” Chaves added.
ATN was created to mitigate air quality concerns that were raised during the 1990s expansion of the resort area. Many hotels in the city are required to have clean-air transportation as part of their development agreement, which ATN fulfills.
Anaheim Public Works Director Rudy Emami said the city is willing to support the use of the tourism district’s transportation funding, which it has a vote to help make happen, but that must be paired with changes at ATN.
“We’ve expressed a willingness to support a temporary bridge agreement for the 90 days, but only if it’s tied to a credible plan to address ATN’s deeper structural issue,” Emami said. “A short-term fix won’t be effective unless it’s part of a long-term solution.”
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