Anaheim wants to take control of the resort area’s transit provider, the Anaheim Transportation Network, in hopes the city can find a way to get the agency on a solid financial footing without asking hoteliers to pay more.
ATN’s board, made up largely of hoteliers and other resort interests, including a Disney representative, met Friday at Anaheim City Hall to hear the city’s early pitch for a takeover.
The transit agency and the city earlier this year signed a letter of understanding that called for exploring such a move. Now, Anaheim wants to move forward with a takeover, but first must win support from ATN’s board.
“The priority is to stabilize ATN financially,” said Public Works Director Rudy Emami, who delivered the city’s presentation to ATN’s board.
ATN moves more than 8 million riders a year, mostly through its ART bus system that serves the resort area.
The transit agency gets money from hotels that pay into the system based on number of rooms and from rider fares. ATN increases what hotels pay annually, with an allowed maximum of 5%, but that hasn’t been enough to offset sharply rising labor costs, which have gone up by 60% since 2020.
“We have a structural operating deficit with really no end in sight,” said ATN Board Chair Matthew Hicks, who also works for OCVibe, the entertainment and housing district being constructed around the Honda Center.
The plan Emami presented does not offer many specifics on a takeover, but says the city would not look to increase what hotels pay any further and would move to “return level of service to ATN’s core mission.”
It’s unclear what level of cuts ATN could face. The agency already prioritizes service at Disneyland’s opening and closing hours.
The takeover plan also says the city would continue pursuing money from a state transit assistance fund. Previous budget projections from ATN that included both increases to what hotels pay and getting that state assistance still had a deficit.
In a takeover, Anaheim’s City Council would become the ultimate authority over ATN, though its board would still exist to oversee many decisions. Whether ATN would be dissolved as an agency or transferred to the city as is has not been settled, Emami said, with pros and cons for both paths.
The city would also take proposals from different companies to operate ATN’s buses and fulfill resort service, and has even had discussions with the Orange County Transportation Authority, Emami said.
Emami also put forward the idea of supporting ATN with a fee tacked onto Uber or Lyft rides and whatever transportation technology is used to connect the Platinum Triangle to the resort area, such as gondolas or autonomous vehicles.
The city would continue working with ATN’s Teamsters-represented union drivers, Emami said.
After the presentation, ATN’s board met behind closed doors to discuss the takeover at length. No decision was reported out of that closed meeting, and ATN has another board meeting scheduled for later this month.
ATN CEO Diana Kotler was not at Friday’s meeting. She submitted her resignation before the board meeting, and her last day will be Sept. 12. She had led ATN since 2003.
A report released last month by the California Policy Center placed ATN as one of the top in the state at recovering its expenses from fares, with low amounts received in taxpayer subsidies. ATN gets 59% of its expenses covered by fares, more than double the state average of 25%.
Wincome Hospitality CEO Paul Sanford, who was chair of ATN’s board until he departed a few months ago, stressed the need for the service to remain high quality as he and other hoteliers have looked to enhance the resort as a destination.
“I’m just concerned about quality and how that’s focused and such,” Sanford said. “I personally see OCTA as a very efficient provider. It does many things fabulously well. But I have not looked at it as a high-quality luxury provider.”