PITTSBURGH -- The union representing Port Authority drivers, mechanics and other employees is fuming after the agency decided Friday to impose its final, best contract offer.

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CEO Steve Bland said the Port Authority's board of directors were legally permitted to take this unusual step because negotiations with Amalgamated Transit Union Local 85 had reached an impasse.

"It became apparent to us -- the management group -- earlier in the week that literally any hope of reaching a negotiated agreement was gone," Bland said.

Board members said this move will keep buses and trolleys moving, although fare increases and service reductions are likely in the near future.

"For Mr. Bland to insinuate that the union has not made any movement is totally false, and I don't like to call anyone a liar, but I'm telling you right now, it's totally false," union President Pat McMahon said.

The new contract takes effect Dec. 1. It calls for a 3 percent pay raise in each of the next three years, and it increases employee contributions on health care from about 3 percent of the premium to 7.5 percent in 2009 and 10 percent in 2010.

McMahon said the union will challenge the legality of the contract before it takes effect, but the board said it was their only option because the union refused to negotiate fairly.

"By any account, by any definition I've ever seen of impasse, we are there, and that's what the law provides for," Bland said.

The law also provides for the union to go on strike if it chooses, but McMahon said that's an absolute last step.

"We're not going to do that to the citizens of Allegheny County. That's who we care about," McMahon said. "They (the management) want to get a deal? They need to quit stonewalling. Come back to the table and be sensible."

As of 5 p.m. Friday, County Executive Dan Onorato had not commented on the newly imposed contract.

Onorato has been threatening to withhold money collected through the county's drink tax to fund the Port Authority unless a contract agreement is reached by the end of the year.