Minnesota Orchestra Offers Fourth Contract Proposal to Musicians' Union

The Minnesota Orchestra Board Negotiating Committee-aided by a coalition of community supporters-has issued its fourth contract proposal in the ongoing labor dispute with the Musicians' Union. The three-year offer includes an average annual salary of $104,500 and a signing bonus of $20,000 per musician. The Board has requested that the Musicians' Negotiating Committee present the offer to the musicians for a secret ballot before the proposal expires at noon on Monday, September 30.

"This proposal represents the best efforts of a coalition of partners in our community who have stepped forward to enable a contract resolution with musicians before September 30, and we ask the Union to consider it respectfully," said Board Negotiating Committee Chair Richard Davis. "It is a compromise that both softens the impact of concessions on musicians and brings our organization to a position that approaches sustainability by the end of the contract. We are grateful to the many leaders, private and community foundations, and individual supporters who have raised or committed to raise special funding to make this possible. We are offering it publicly because this is truly an offer from our community. We are offering it today because time is running out."

If adopted, the proposal would preserve the Orchestra's entire 2013-14 subscription season, which begins in October, for local audiences and would maintain two November performances at Carnegie Hall. Music Director Osmo Vänskä has said the Orchestra must rehearse the week of September 30 in order to appropriately prepare for the Carnegie Hall appearance.

Initially convened by the Carlson Family Foundation, 15 Minnesota foundations-including those of Carlson Companies, U.S. Bank and Wells Fargo-have stepped forward to support a one-time bridge grant to enable a resolution in the long dispute. Foundation leaders have noted that their collective contribution does not represent a permanent increase in their funding commitments to the Minnesota Orchestra. "We consider this a unique offering, born of shared respect for the Orchestra and in recognition of so many Minnesotans committed to finding a solution," said Marilyn Carlson Nelson, Vice Chair Carlson Family Foundation. Extending the coalition further, the community-based symphonic support group SOS-Save Osmo has also committed to provide bridge funding.

Central tenets of the three-year proposal:

• The proposal delivers an average annual salary of $104,500 per musician over the life of the contract, as well as $33,000 in benefits per musician. (Salaries range from $89,000 to $150,500).
• In addition, musicians receive a one-time individual signing bonus of $20,000.
• The three-year contract includes a series of stepped concessions, beginning with an 18.6% reduction in year one (same rate SPCO musicians negotiated), 21.2% in year two and 25.0% in year three. Factoring in bonus pay, the average annual musician salary over three years results in a reduction of 17.7%.
• The proposal includes revenue sharing if the Orchestra exceeds its budget goals.
• Proposal includes a minimum of 10 weeks paid vacation.

In addition, President and CEO Michael Henson has volunteered to accept the same salary reduction musicians receive.

Contract results in $3.6 million deficit over three years, despite revenue increases

Under the terms of the three-year proposal, the Minnesota Orchestra would accrue a deficit of $3.6 million over three years, due to the salary costs in the contract. "Our aim was to eliminate our $6 million annual deficit entirely. We have moved our position considerably in hope of getting musicians back on the stage and audiences back in Orchestra Hall in October," said Board Chair Jon Campbell.

The Board's original proposal was an important element in the plan to eliminate the organization's annual $6 million deficit entirely. It called for a 32 percent salary reduction, leading to an average annual musician salary of $89,000 and minimum salary of $78,000. However, cuts to expenses-including the proposed reduction in musicians' salaries, the earlier layoff of 20 percent of all administrative staff, and salary and benefit reductions for all remaining staff-are only part of the plan to eliminate the deficit.

Campbell explained, "It's important to remember that our business plan requires us to bring in $2.1 million in new net revenue each year, starting with Fiscal 2014, through increased donations and earned income. But even with a revenue-generating plan this vigorous, we will still experience a new cumulative deficit of $3.6 million over the three-year life of the proposed contract."

He continued, "It should be clear from this commitment that we are confident about this organization's future and willing to do everything we can to generate new funding for the Orchestra. With dramatic cuts already undertaken in every other area of the operation, and commitments to aggressive revenue increases for future years, all we need is for the musicians to partner with us and agree on a resolution. Our negotiating committee is ready to have further discussions at any point in the next four days."

Contract talks between the Minnesota Orchestral Association and its musicians, who are members of the Twin Cities Musicians' Union (Local 30-73), began on April 12, 2012, during which time the Orchestral Association has issued four different contract proposals. Musicians have not responded with a contract counterproposal. In December, the Orchestral Association made public its annual independent audit, conducted by CliftonLarsonAllen, which revealed an operating deficit of $6 million for Fiscal 2012. In June, a special review by the State's Legislative Auditor confirmed that the Orchestra has used all state funding appropriately.

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