A deal seems within striking distance to end the three-month-old lockout of musicians at the St. Paul Chamber Orchestra. Sources on both sides of the labor dispute cautioned that while significant differences remain, a recent exchange of proposals is encouraging.

"It's indicated that we are making progress and we are more confident now that we will be able to achieve a resolution that is artistically and financially viable," said board chair Dobson West. "We don't know how soon that will be, because there is a lot of work left."

Carole Mason Smith, head of the musicians' bargaining committee, was less sanguine, particularly on the financial issues.

"There is still a considerable gap between what we are offering and what the management is offering," Smith said Friday.

However, union musicians on Tuesday sent a proposal to management that in principle accepted two key management proposals: an early-retirement buyout program, and an orchestra with 28 full-time positions, down from 34. The two proposals go hand-in-hand, because the number of musicians older than 55 who choose to take buyouts would affect whether there are involuntary layoffs.

Salary remains a significant point of contention. Management previously has offered a base of $50,000 with a guarantee of $62,500 for current musicians -- new musicians who join the SPCO would receive the lower figure. Those numbers would rise by $1,000 in each of the next two years of the proposal. The board also has offered a $10,000 one-time bonus to be paid to each current musician if the deal is ratified.

Musicians accept the $62,500 figure but still resist what they call a "two-tier proposal" based on the $50,000 minimum figure for new musicians. They also seek future increases that are larger than management says it can accept.

Management on Friday sent 22 questions to the musicians about the latest proposal. Smith said the union expects to respond Saturday. The musicians played concerts Thursday and Friday at Central Lutheran Church in Minneapolis.

Less transparent than the financial terms, artistic control of the SPCO has emerged as a key point in the negotiations.

"It's very important how we rebuild the orchestra," Smith said. "It's a matter of how we recruit and retain the best musicians. Do we have the complement of players to do the repertory with stability in the ensemble?"

The SPCO contract expired June 30 but the two sides continued talking. The 2012-13 season began as scheduled but musicians were locked out Oct. 21 after missing a deadline to accept an offer. They subsequently formally voted to reject that proposal. Concerts have been canceled through March 23.

Graydon Royce • 612-673-7299