Anaheim Transportation Network Faces Budget Deficits

Categories: Business NewsEnvironmentNewsTransport

Buses at the Anaheim Transportation Network station, illustrating public transit efforts.

News Summary

The Anaheim Transportation Network (ATN) is confronting significant budget deficits threatening its operational sustainability. With labor costs surging over 60% since 2020, and stagnant revenue growth, ATN is facing a projected shortfall of $1.1 million for the upcoming fiscal year, possibly increasing to $2.8 million. To address these challenges, ATN has formed a partnership with the city of Anaheim, exploring potential city takeover and has announced a new electric transportation service named EVE to enhance connectivity between Anaheim and John Wayne Airport.

Anaheim, California – The Anaheim Transportation Network (ATN) is grappling with budget deficits that threaten its operational sustainability. The agency, which serves over 8 million riders annually through its ART bus system primarily focused on the resort area, is expected to face a budget shortfall of $1.1 million for the upcoming fiscal year. If no additional funding is secured, this deficit could swell to $2.8 million.

Faced with a sharp rise in labor costs—over 60% since 2020—ATN’s financial struggles are compounded by stagnant revenue growth. Hotel contributions, which account for 60 cents per occupied room night, are set to increase to 63 cents in the new budget year. The agency aims to utilize $1.7 million in unallocated funds from the Anaheim Tourism Improvement District to alleviate its budget woes.

In a bid to stabilize its finances, ATN has entered a letter of understanding with the city of Anaheim. This partnership will explore potential city takeover or control of the transit agency, with a feasibility study period of 90 days to examine ATN’s operations and financial documentation.

ATN is prioritizing the prevention of service cuts and staff layoffs, as labor costs comprise more than 70% of its operating expenses. The current labor contract for drivers, represented by Teamsters Local 952 and set to expire in December, is anticipated to include increases in starting wages.

The transit agency recently received $1.55 million from the tourism district to help manage current fiscal challenges. Additionally, ATN has announced a new electric transportation service named EVE, aiming for 100% fleet electrification by 2026. EVE’s vehicles, named after aviator Evelyn Bobbi Trout, will operate between Anaheim and John Wayne Airport, enhancing connectivity while supporting environmental goals.

ATN’s existing services extend to events like OCVibe and the upcoming 2028 Olympic Games, as the agency works towards achieving air quality standards with a focus on zero-emission vehicles. Plans are in place to leverage state funding for additional electrification efforts leading up to the Olympics, further supporting the transition to cleaner transit options.

Another facet of ATN’s services is its FRAN micro transit program, known for providing free rides around designated districts. This initiative is part of ATN’s broader strategy to enhance public transportation options within Anaheim while managing financial sustainability amid increasing operational costs.

Overall, the situation at ATN underscores the challenges faced by public transit agencies in maintaining service levels in the face of rising labor costs and economic pressures. The upcoming review with the city of Anaheim may determine the agency’s operational future and its ability to continue serving millions of riders each year.