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(Bloomberg News circulated the following article on December 21.)

NEW YORK — New York’s transit union met with a state mediator in an attempt to end a strike that forced the city’s 7 million bus and subway riders to find alternative ways to and from work for a second day.

Additional commuting routes opened this morning as non- striking Metropolitan Transportation Authority commuter rail lines began shuttle service between Manhattan stations and terminals in Brooklyn, Queens and the Bronx.

“The crowds will only increase, the lines will be long,” said Donna Evans, a spokeswoman for Metro North Railroad, which set up a temporary park-and-ride station at Yankee Stadium.

The step toward mediation came after a Brooklyn judge fined Local 100 of the Transport Workers Union $1 million a day for violating an order banning the strike, and the union’s national president told striking members “the only road to contract victory” was “not by strike but continued negotiation.”

The walkout by 32,000 workers early yesterday, the first in 25 years, occurred at the peak of the holiday shopping season. City officials said it may cost New York as much as $400 million a day. No new negotiations were immediately scheduled, MTA spokesman Tom Kelly said.

Mediator Richard Curreri held his initial meeting with the first of the opposing sides last night, James Edgar, executive director of the State Public Employment Relations Board, said in a telephone interview from Albany.

Arbitration

Curreri, the state board’s director of conciliation, the state-run MTA or the union itself could declare an impasse in the talks, which would trigger establishment of an arbitration panel, Edgar said.

MTA Chairman Peter Kalikow offered to go to arbitration in the hours before the Local 100 President Roger Toussaint broke off negotiations on Dec. 19, three days after the union’s contract expired.

About 1,000 union workers yesterday crossed the picket line and returned to work doing clean-up and clerical tasks, the NY1 cable news station said, citing New York City Transit President Lawrence Reuter.

The union’s top national official, Michael O’Brien, president of the Transport Workers of America, called on New York members to return to work, and to negotiations.

“I personally spoke before the Local 100 Executive Board when it met” early yesterday to vote on the walkout “and told them that I would not approve this strike,” O’Brien said in a statement posted on the union’s Web site. “I told them that the only road to contract victory for the membership was not by strike but continued negotiation. I continue to believe this.”

Contempt

The stance prompted the New York state attorney general’s office to withdraw a contempt-of-court application that would have put the parent union at risk of the same penalties as Local 100.

James Henly of the attorney general’s office said the state accepted that the national union didn’t authorize the strike and considered it illegal. David Rosen, general counsel to national union, told reporters the local was on its own.

Retailers were among the worse-hit businesses, Mayor Michael Bloomberg said. “Hundreds of stores haven’t been able to open, and some that did have had virtually no business.” Along one stretch of Eighth Avenue, he said, “40 percent of the stores weren’t even open.”

Coping

New Yorkers shared cabs and carpools, endured waits of more than an hour to get through police checkpoints enforcing high- occupancy vehicle restrictions and walked miles to work in below- freezing temperatures. Long lines stood at Pennsylvania Station last night as more commuters used suburban trains.

The city implemented a contingency plan that restricted travel by prohibiting vehicles carrying fewer than four people from entering Manhattan south of 96th Street between 5 a.m. and 11 a.m. and closing streets around the financial district.

The mayor reported about a 15 percent increase in 911 emergency calls. Police worked 12-hour shifts. Attendance was down by about a quarter in the city’s schools, which began classes two hours late.

The Long Island Rail Road said on its Web site it had canceled seven regular morning and evening rush-hour trains starting today to cope with a surge in passengers from the Borough of Queens. Regularly scheduled trains serving Queens will stop only at hub stations from 6 a.m. to 9 a.m. and from 4 p.m. to 7 p.m. Special shuttle trains would be added for commuters from Jamaica, Kew Gardens, Forest Hills and Woodside, the railroad said.

The railroad yesterday carried 50,000 passengers more than the 100,000 riders who normally use the line, the Associated Press reported.

Many people opted to work from home or walk to the office. Those from outside the city were taking advantage of company carpools and vans from Penn Station and Grand Central.

`Merry Christmas, New York’

Kathy Xenos, 36, an Astoria, Queens, resident and general manager of Upper East Side restaurant Brasserie 360, paid for all of the restaurant’s 62 employees to get to work using taxis or car service, costing $30 to 50 a trip.

“Five days before Christmas,” Xenos said. “Merry Christmas, New York.”

One employee walked two hours and 45 minutes from Harlem, and another walked three hours from Brooklyn. Xenos had a 45- minute drive into Manhattan with a co-worker, and picked up two passers-by so they could enter Manhattan under the city’s travel restrictions.

“That’s the great thing about New York: everybody comes together and helps each other,” she said.

The shutdown of the nation’s largest transit system came late Dec. 19, after Toussaint left face-to-face talks with the MTA’s Kalikow, about an hour before a midnight strike deadline. The union had halted two bus lines serving about 50,000 riders in Queens earlier in the day while talks continued.

Individual Fines

Toussaint told a news conference yesterday he was fighting for “dignity and respect on the job” and to stop the “erosion of health-benefit coverage for the working people of New York.”

Union leaders found in contempt of court face the possibility of individual fines of up to $1,000 a day. Henly, of the attorney general’s office, said he wanted “to see what effect this order of the court has.”

The MTA, whose board is appointed by Governor George Pataki, offered the union a three-year contract with raises of 3 percent, 4 percent and 3.5 percent through 2008, Kelly said. The transit agency also agreed to retain the union’s full pension eligibility age at 55, on condition new hires contribute 6 percent of their annual earnings for 10 years to help finance future pensions, he said.

Holiday

The state agency also offered to give workers Martin Luther King Jr. Day as a paid holiday.

Subway operators earned an average of $62,438 a year, including overtime, under the previous three-year contract, the MTA said. Train conductors averaged $53,000, subway booth clerks $50,720, and bus drivers $62,551, the state agency said. The MTA wasn’t able to provide the average amount of overtime.

U.S. bond and stock markets based in the city operated with regular trading hours, as did the New York Mercantile Exchange, the world’s largest energy market.

The Nymex chartered about 24 buses to transport workers beginning at 6 a.m. from points throughout the city, according to the exchange’s Web site.

The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.