With Port Authority contract talks stalled, a possible strike looming and the agency running out of money, Allegheny County Executive Dan Onorato last month happened to run into a top AFL-CIO official he knew.

Richard L. Trumka, the AFL-CIO's secretary-treasurer and a Greene County native, inquired about negotiations. Over coffee, Mr. Onorato laid out the dire situation.

"I told him, 'This is bad,' that the Port Authority is in trouble. It's on the brink," Mr. Onorato said.

Mr. Trumka asked if Port Authority management would be willing to bargain at a neutral site. With that question, Mr. Trumka became a pivotal figure operating behind the scenes.

"We had nothing to lose," Mr. Onorato recalled yesterday. "It ended up in hindsight being a great move."

That chance encounter paved the way for four days of breakthrough talks in Washington, D.C., leading to a deal endorsed Sunday by the 2,300-member Local 85 of the Amalgamated Transit Union.

By the time talks commenced in Washington, everyone had firmly staked out their positions.

Mr. Onorato pledged to withhold $27.7 million raised from controversial new county taxes, money that was needed to leverage roughly $180 million in state funds. He said he would release the money only if the Port Authority figured out how to curtail future retiree health care and pension costs.

Port Authority CEO Steve Bland and his board were ready to unilaterally impose a contract Dec. 1 that surely would have led to long litigation.

The union, whose executive board had rejected a neutral fact-finder's report embraced by the Port Authority, seemed prepared for a work stoppage.

That is the picture Mr. Onorato said he painted for Mr. Trumka.

"I laid it out for him. I said, 'Dec. 1's real. The Port Authority's going bankrupt. It's over if we don't get this fixed,'" Mr. Onorato said.

The offer to meet in Washington was made and accepted. Part of the attraction: Mr. Trumka knew Warren S. George, a former Local 85 president who is head of the international Amalgamated Transit Union.

Mr. Onorato dispatched Mr. Bland and his team to Washington.

For the first few days there, Mr. Bland and his people provided detailed financial and actuarial information. They wanted to show that it was simply too expensive to continue allowing workers to retire early with a no-cost, luxury health care plan.

Future costs for those benefits were mounting and had become a crushing burden. If nothing changed, the agency would have to make drastic service cuts and divert the money to fund retiree health care, Mr. Bland and Mr. Onorato said.

"I felt the numbers don't lie," Mr. Onorato said.

Numbers like the $63 million in health care costs the Port Authority has in its current budget -- roughly the same amount as Allegheny County's health care budget for half the number of employees. Numbers like the 2,700 Port Authority retirees, many of whom retired early with generous health insurance benefits, whose ranks would continue to swell.

"They would have gone to a roughly 30 percent service cut to balance the budget, that's how big of a deal this is," Mr. Onorato said. "The ballooning of the post-retirement health care was sinking this authority at a rate that was unbelievable."

What made the difference in Washington, according to Mr. Onorato and Mr. Bland, was the recognition on the part of top officials with the AFL-CIO and international Amalgamated Transit Union that the agency was facing a true fiscal crisis.

"It wasn't posturing," Mr. Bland said. "In my opinion the thing that probably allowed a deal to get done was they said, 'Yeah, we get it, you have an issue.'"

Mr. Trumka and Mr. George could not be reached for comment.

Heralded by Mr. Onorato as "historic" and Mr. Bland as "unprecedented," the concessionary contract hands both men what they have been agitating for: a way to control so-called legacy costs. Port Authority estimates that the agency will save nearly $93 million over the four-year contract.

"Instantly, it's not a cash savings," Mr. Bland explained. "It's an avoidance of future costs."

Much of the savings are going to be achieved by raising the retirement age to 60 with 30 years of service from 55 with 25 years of service to qualify for health care until Medicare kicks in.

As a concession to the union, workers still will be able to retire early during the life of the contract -- although they will have to make the same contribution to health care as active employees.

"This does exactly what I was asking for," Mr. Onorato said. "This $92.8 million savings over four years, that is a significant reversal of prior contracts for Port Authority ... Every contract that has been signed had the legacy costs going up, not down."