A conflict over healthcare costs between the Anaheim Transportation Network and a transit contractor could cost more than 300 bus drivers their jobs in November.

First Transit staffs the Anaheim Resort Transportation’s shuttle service. Its contract with ATN began in mid-2014 and was supposed to end in 2019. In July, the company asked ATN, which manages the shuttle program, to absorb some of its financial costs, according to Todd Priest, ATN spokesman.

First Transit, owned by Cincinnati-based FirstGroup, cited challenges with California’s paid sick leave law, Priest said.

“While we appreciate the service First Transit has provided since 2014, ATN doesn’t believe public transit riders should be required to help them keep their contractual commitments,” Priest said in an email to the Register.

“First Transit participated in a competitive and transparent procurement process with other large transit providers. The five-year contract awarded First Transit included annual payment increase(s) to them, yet they were still seeking additional financial assistance, through higher rates, in order to meet their obligations.”

ATN opted to cancel the contract with First Transit, which has since filed worker adjustment and retraining notification notices with the state, indicating it would terminate 319 employees in Anaheim as of Nov. 30. The resort shuttle service will not be interrupted, Priest said.

According to the contract, First Transit received a regular operating rate of $24.09 per vehicle service hour for its first year. The total number of revenue vehicle hours for the year was 220,000 hours (or roughly $5.3 million).

During the contract’s second year, the total number of revenue vehicle hours rose to 240,000, then 250,000 for the next three years to keep pace with rising costs.

ATN is looking for a new provider, which could then hire the First Transit employees. Priest said many transit providers have already submitted bids. Interviews will take place next week.

Contact the writer: hmadans@ocregister.com or Twitter: @HannahMadans