NEW YORK – After three days on the picket line, New York’s transit workers were back on the job Friday amid signs that a contract agreement was near.

Union officials and negotiators for the Metropolitan Transportation Authority met throughout the day and were close to hammering out a final deal, a source familiar with the talks said Friday.

“They just have to put the meat on the frame,” the source said.

The backbone for a possible deal called for the MTA to drop its calls for pension reform, and seek greater savings in health-care costs. But the two sides had made progress on other issues, the source said.

Transport Workers Union Local 100 President Roger Toussaint has scheduled an executive board meeting for Tuesday.

The apparent progress was second only to the glitch-free restoration of full subway and bus service by Friday’s morning commute, although ridership on the Friday before Christmas was light.

“I didn’t work for two days, and one day I was three hours late,” said deli worker Jose Rirrano, 31, who takes the 3 train from East New York in Brooklyn to the upper West Side. “Today, no problem. The trains are running smoothly.”

But the strike’s effects still rippled across a city with a new appreciation for mass transit.

“A lot of people were totally in chaos,” said John Hart, 49, who was on a train to his doctor in Brooklyn. “I have an infection that needs to be treated and I couldn’t do anything till this morning.”

Businesses tallied the millions in pre-holiday sales they lost. New Yorkers rested their sore feet and put their bicycles back in storage. The city took police officers off mandatory overtime and lifted Manhattan roadblocks.

“I’m relieved, but I’m not totally sure what the outcome was,” said Manhattan commuter Ben Ali, who rode his bike during the strike. “I think nobody won.”

Yet the contract dispute between the MTA and the TWU remains unresolved – leaving some strike supporters to question whether the walkout and its financial penalty was worth it.

“I don’t know how to feel because I don’t know what we have,” said station agent Tim Rink. “We went out. We made the sacrifice. I don’t want to say anything negative because the contract could turn out to be better.”

The TWU’s 33,700 members can expect to have six days of pay deducted from their checks in the future, part of the penalty under the state Taylor Law for the three-day strike.

The union also will have to give up the right to automatically deduct members’ dues from their checks, but the labor board may take months to determine the length of that penalty.

And even the $1-million-a-day fine levied by a Brooklyn Supreme Court judge could be modified or appealed after the parties return to court in a month.

“The union is going to get fined. It’s up to the judge,” Mayor Michael Bloomberg said Friday. “The judge I suppose could say no, but the judge had a direct order.”

The TWU walked out to protest the MTA’s insistence on pension changes for new members, but Bloomberg said the union has to face reality.

“Every company and every government is wrestling with the problem,” he said. “Medical benefits for them and pensions for them are getting more and more expensive.”

The mayor also said he expects a contract “sooner rather than later.”

Lawyers for both sides met with an administrative law judge for 40 minutes in a Brooklyn office of the state labor board, but declined to comment when they emerged.

“They didn’t get what they wanted and they’re back at work,” rider Yvette Solomon said while buying a MetroCard at Penn Station. “It was like all this effort – this trouble we’ve all been through over the last few days – was a waste of time.”

Some New Yorkers who suffered in the strike believed the union was still right to stand up for its benefits in the face of heavy penalties – and said they saw their own futures echoed in the union’s battle.

“I’m for unions in any form and shape,” said Ade Oshodi, 26, a City College student who spent five hours in a car getting back and forth from Jamaica, Queens. “I don’t know if they have accomplished anything, but I hope they will.”

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