The Anaheim Transportation Network, which serves millions of riders each year in the resort area, will stop operating after March 31, officials said Wednesday, Jan. 29.
ATN’s governing board, made up largely of hoteliers and other resort interests, voted unanimously to “conduct an orderly wind-down,” board chair Matthew Hicks said in announcing the decision after a closed session meeting on Wednesday.
Hicks, who also works with the under-development entertainment and housing district OCVibe at the Honda Center, reported that as part of the wind-down, ATN staffers would later “bring back to the board financial decisions not within the operating budget.”
ATN moves more than 8 million riders a year, mostly through its ART bus system that serves the resort area. City leaders have said the public transportation service is critical for area tourists and employees.
But ATN has, for several years, faced structural deficits in its budget.
The transit agency gets money from hotels that pay into the system based on the number of rooms and from rider fares. ATN has increased what hotels pay annually, with that contribution capped at 5%; but those increases have not been enough to offset rising labor costs. More than 70% of the transportation provider’s operating costs go toward labor, its officials have said.
“For nearly three decades, the Anaheim Transportation Network has supported mobility in the Anaheim Resort — serving residents, employees and millions of visitors,” a statement Wednesday from the ATN Board of Directors said. “After an extended evaluation of our current and future financial position and exhausting all options, ATN will begin an orderly wind-down of operations.
“This transition will be implemented in a manner to allow for coordination and transparency as services are responsibly concluded,” the statement said. “The ATN Board of Directors appreciates the community’s continued support of the service through the conclusion of operation.”
The city of Anaheim last year considered taking over the transportation network, in hopes of solving the agency’s financial troubles without asking hoteliers to pay more. ATN and the city signed a letter of understanding last year that called for exploring the acquisition.
But Anaheim is no longer interested in the move, city officials said.
“Businesses in Anaheim’s visitor economy are preparing options. Hotels that have utilized ATN are also looking at their options,” city spokesperson Mike Lyster said shortly after the ATN board’s vote. “No one should be concerned about any upcoming visit to our city. Anyone who’s been to our theme parks knows the high level of service getting from parking to the gates. We have every confidence that will continue.”
Last year, ATN formally requested the Anaheim Tourism Improvement District, which is funded by a fee collected on hotel stays, to provide it with funding.
The request letter described a monthly shortfall of $730,000.
The Anaheim Tourism Improvement District approved $5.7 million between contributions in July and September and, last night, a request for another $2.5 million.
Lysters said longer term, the city will “continue to look at innovations in transportation and options to connect our transit center in the Platinum Triangle to the resort area. That exploration, while in early stages, is ongoing.”
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