Contract negotiations between the Honolulu Symphony and its musicians have hit an impasse after the musicians union rejected last week what symphony officials called their "best and final" offer.

The Honolulu Symphony Society has proposed a radical reduction in the overall budget — including cuts in the number of concerts each year — to help the financially beleaguered symphony emerge from Chapter 11 bankruptcy. The society has until Oct. 15 to submit a reorganization plan to U.S. Bankruptcy Court.

According to a statement released yesterday by society Chairwoman Kimberly Miyazawa Frank, the society proposed cutting the symphony’s budget from $8 million in the year prior to the bankruptcy filing to $1.7 million in the first year of reorganization. Miyazawa Frank said this would be achieved through cuts in administrative expenses, a reduction in the number of concerts played and cuts in medical benefits and instrument insurance costs.

The Musicians’ Association of Hawaii, Local 677 of the American Federation of Musicians, rejected the proposal during a June 30 meeting.

At a meeting Friday, the symphony society presented the "best and final" offer, agreeing to pay one-half the cost of medical benefits.

The union rejected the offer and proposed instead to reduce the symphony’s performance schedule to 28 weeks from 29 weeks, which union officials said would result in savings of up to $100,000. The symphony society rejected that proposal.

"We are deeply saddened and disappointed that agreement could not be reached," Miyazawa Frank said in the statement. "At the same time, we know the clock is ticking on this reorganization. Remaining in a prolonged state of limbo, without a collaborative, good faith effort to create a sustainable symphony organization, depletes our momentum and ability to move forward with a plan."

Jonathan Parrish, a spokesman for the union and co-vice chairman of the Orchestra Committee, said the symphony society’s claim that musicians would retain their current rate of pay is "misleading" because cuts in the performance schedule would nonetheless result in a 92 percent reduction in their annual income. According to the union, the symphony society’s proposal would result in musicians being paid $3,256 for five or six performances compared with $30,885 for a full 43-concert schedule (including MasterWorks and Pops seasons).

Parrish also refuted Miyazawa Frank’s claim that the union effectively had ceased negotiating by rejecting the final offer. He said the union officials contacted the society after Friday’s meeting to reiterate they were willing to continue talks.

"We’re obviously far apart right now, but we made it clear on Friday that we still hope to hear from them," Parrish said. "The ball is in their court, although they seem eager to declare a deadlock."

The 110-year-old symphony filed for Chapter 11 bankruptcy reorganization in December and canceled the remainder of its 2009-10 season. The move came after several years of financial shortfalls, last-minute bailouts and a protracted effort to pay back wages owed to its musicians.

The symphony society’s reorganization plan is based on an extensive organizational analysis, prepared by Honolulu Symphony Foundation Chairman Mark Wong and his company, Data Collection Systems, which indicated that the symphony’s current business model — in which 30 percent of revenue is generated by ticket sales — was "unrealistic and unsustainable." The musicians union criticized the analysis as flawed in its data collection and biased against musicians.

In April, U.S. Bankruptcy Judge Robert Faris denied the symphony society’s request to extend the period in which it alone could submit a plan for reorganization, effectively clearing the way for symphony musicians and others parties to present alternative plans.