A modified contract deal, including $1.8 million in musician salary cuts, will shave costs for the next 3 years.
Musicians at the Minnesota Orchestra have agreed to concessions in the face of financial pressures on the organization. The deal saves about $4.2 million -- from salary, pension reductions and frozen positions -- over the remaining three years of a contract that expires in 2012.
The plan involves pay cuts totaling $1.8 million. The orchestra will also delay filling open positions, which saves another $1.8 million. Reducing pension contributions to 5 percent of salary from 7 percent will save $600,000.
Musician salaries make up 51 percent of the orchestra's annual budget.
President and CEO Michael Henson said the 95-player orchestra has 10 positions open, including that of concertmaster following the departure of Jorja Fleezanis. That post will definitely be filled, Henson said. The new agreement allows the orchestra to leave an average of six positions open over the course of the deal.
Under the original contract, musician salaries would have risen from $95,000 in October 2007 to an annual minimum of $120,016 by 2012. That figure will now be $113,204. Henson said the musicians agreed to a wage freeze this year (forgoing a 4 percent raise) and then will receive a reduced raise in 2011-12 (4 percent instead of 6 percent).
The original salary would have placed the musicians in the top five of orchestras nationally. Kathy Kienzle, principal harp and a member of the musicians' negotiating group, said the hope now is to stay in the top 10. Musicians at the Boston Symphony have taken a two-year freeze. Philadelphia and Chicago have both taken cuts, and Cleveland is in the midst of talks on a deal that expires this year.
"It's all over the map," Kienzle said. "Philadelphia took cuts that were larger than ours, Chicago a little less."
Mid-level orchestras are being hit even harder. In April, musicians at the St. Paul Chamber Orchestra agreed to a 12 percent reduction in pay for 2009-10.
Minnesota Orchestra management and union representatives first met in mid-May to discuss the financial situation. Kienzle said "there was absolutely an acceptance that there would need to be concessions."
The orchestra announced administrative staff and budget cuts earlier this year that resulted in $2.3 million in savings for the current-year budget. Those reductions included eliminating four full-time staff positions and reducing part-time staffing, instituting salary reductions or wage freezes for all staff, and reducing employer contributions to staff retirement plans. Music Director Osmo Vänskä and Henson reduced their salaries by 10 percent and 7 percent, respectively.
Henson said the subscription season has not been truncated, even though other shows have been cut.
"We're going to modify as little as possible going forward," he said. "No one knows where the economy is going."
In June, the orchestra announced plans for a $40 million building renovation -- scaled back from a $90 million project that was talked about two years ago.
The Minnesota Orchestra's 2008-09 concert season ended on Saturday night with a Sommerfest concert performance of Verdi's Aida. The fiscal year ends on Aug. 31.
Graydon Royce • 612-673-7299