I’m Off…

by:

Joe Patti

As mentioned before, I am off to the WAA conference this week. I am pleased to note that there will be a session on income taxes and international artists. Given my crash course in tax treaties lately, I will be attending that with some interest. Maybe I will find out some new things to pass on to my liasion here at the university.

I went into work today despite the holiday because I will be out of town for a week and really don’t want to have my work pile up too much. The vice-chancellor had been taking about starting an arts administration certificate program so I emailed him expressing my interest in contributing to its development.

Given my *cough* strong feelings about how such a program should be structured, there is a fair chance I could eventually disassociate myself from the program I help develop. Exploring the decisions that go in to developing it, whether I agree with them or not, would be really fascinating for me though so I don’t really mind that I could end up muttering curses under my breath one day.

Stay tuned to find out how it all comes out–the tax stuff and the AA certificate program.

Little Polish on the Skills

by:

Joe Patti

So it has been a busy week already. I have had so many meetings that I got that feeling that I ain’t getting anything done and considering I have a lot to do before going to the WAA Conference next week, that ain’t good.

But I have been learning some new things…

Monday I had a meeting with the head of Human Resources. I am on a committee to hire an assistant for myself. The Human Resource department has to look over the questions we are going to ask and approve of them. This is partially to make sure that we aren’t asking any questions connected with the forbidden topics like race, martial status, creed, political affiliation, religion, etc. We didn’t have any of those type of questions, but the head of HR wouldn’t sign off on them because he didn’t feel they would elicit effective answers.

I have to admit, he did have a point. Some of the questions other committee members had submitted dealt with how a person felt about certain situations like meeting new people or their philosophy on customer service. Part of the problem he had was that none of these things were part of the KSAs (knowledge, skills, abilities) of the job description. He encouraged us to rephrase the questions as situationals–what have you done in such a situation or what would you do?

He said that it doesn’t matter how people feel about a certain job as much as how they would act in a situation. His point was that people often hate to do certain aspects of their jobs, but they recognize the value of doing it and doing it well so dismissing them for how they feel might result in you discarding a valuable person.

On the other hand, if they mention they ignored a customer’s complaint because they were incessant whiners when you ask about their experiences, you know how they feel and how they would act.

I never thought of these issues before. So even though it was rather annoying to have to rewrite the questions and couch them in a manner that would satisfy the head of HR and still serve to get the information about the candidate’s personality, I have to admit his way can prove to be more valuable.

Yesterday I attended a meeting of the Performing Arts Presenters of Hawai’i (earlier mention of what they are all about here). We were discussing what our plans were when we attended the Western Arts Alliance Conference in Spokane next week. Not everyone was going so we were making a list of the groups everyone might be interested in presenting so we could check them out and approach agents, etc.

I had been warned to bring an extra suitcase so I could carry presskits and other materials back from the conference. A few weeks after I return, we will all meet again for a marathon review of videos, etc of likely prospects.

Then today I met with a representative of a local hotel chain with whom I am hoping to house most of my visiting performers. I was really reminded of the power of good customer service. I had contacted representatives of a number of chains, but she was the only one that decided that she could better serve me by having me come out and see her properties and treat me to lunch. Of all the others I contacted, only one other has even responded with the information I requested.

The thing is, none of them need my business, especially the woman who took me out. Right now tourism is excellent and there are hardly any rooms to be had on O’ahu. Even though I am bringing a fair bit of business, the hotels can make better use of their time wooing tour operators and travel agents than me. This is especially true because I am asking for kama aina rates (discounts for locals) in order to help me stay on budget.

This woman spoke to me, assessed my needs and then picked the mix of properties of the 20 or so her company manages on my island that would best suit my needs. She stayed away from the really economical places that might prevent jet lagged artists getting off a 5+ hour flight from getting rest and also avoided the ones that were too upscale. My time wasn’t wasted looking at the wrong places.

Every hotel we went to, the general manager came out and met me like I was an important account. They showed me around the rooms personally, offered me water and wet towels to refresh myself. The woman showing me around took me out to lunch at their flagship property where my car was valet parked and returned to me swiftly with my A/C and radio set to create a welcoming environment in my own vehicle. Now perhaps they do much more for travel agents, but they could have done far less for me.

I still have to be conscious of price, but if they end up being a few bucks more a night than another quote I get, they will certainly be getting my business. They know that good customer service means good service to everyone and they know that it is the little touches like the way the valet delivers your car that matters. They also probably know that good word of mouth is the best advertising. Not only will I speak well of them on my island, but because they have properties on the other islands, I will be saying great things about them to the other members of the consortium.

It just verifies my feelings about the importance of customer service and underscores how important it will be for me to rectify all the impediments to customer service at my theatre.

Tax Treaties

by:

Joe Patti

So I am learning about something I have never come in contact with before in my career–international tax treaties. Apparently the IRS is joining the INS and making it difficult for international acts to decide to perform in the US. I am told since 9/11 occurred, the IRS has really been cracking down on enforcing taxes on international performers. I guess they feel since they caught Al Capone on taxes, maybe they will get lucky and uncover some plots.

On the other hand this seems like a great topic for the blog so I have to grudgingly give an iota of appreciation for coming in contact with it.

In any case, what this means is that if a performer exceeds a certain level of income in the US in a year, as a presenter you are obligated to deduct 30% from the fees you are paying them. They can file to get it back but that can get annoying as you might easily imagine.

The federal government has apparently gone after a number of universities who haven’t done this for back taxes so my school is taking it very seriously and so are a lot of other places. One of the first things the guy who advised me told me is not to believe folks when they complained we were the only ones doing it. He forwarded me some emails from a Listserv group (definition of Listserv here if you aren’t familiar with the term) that had members from all over the country asking questions related to the tax situation.

Here is what I know so far–Any international performer who makes over a certain amount (the amount differs accord to the treaty the US has with the country of origin) has to have 30% deducted from their fees. Apparently under certain circumstances, this can apply to the value of accomodations and transportation the host organization provides as well. So if you are paying them $10,000 and then provide $10,000 worth of services in airfare, hotels, rental cars, etc you could potentially end up having to deduct $6,000 for taxes. The bit about how much of airfare and accomodations qualifies is a bit more convoluted and apparently doesn’t apply to our situation. Perhaps because they are paying their airfare out of their own fee.

It doesn’t matter if you are paying an agent, it is to be handled as if you are paying the artist directly. (So the performer hates you cause they get paid less, the agent hates you because their cut is smaller.)

The thing that really surprised me is that a we have a group from a foreign country that has incorporated in the US and has its own federal ID number. I assumed that since they would have to file corporate income tax, we would be off the hook with the percentage since the onus would be on them to tell the truth or lie about how much they made. Nope, my guy says. They will be exceeding the $7500/yr threshold set by treaty with their country so unless they show rules to the contrary, they get a bit taken out too.

So the question I have before my people right now–When do we make the performers and their agents aware of the fact they won’t be getting all of their fee, at least not up front.

I am going to a booking conference next week is this going to essentially end my ability to present really good international acts? Are people going to refuse to perform or bump their fees to make up the difference (which is a range I can’t afford). Yeah, there are plenty of great domestic acts and I am looking forward to seeing some at the conference next week.

But I am also living at a crossroads of the world where no racial background is dominant. People are interested in seeing things from their own cultural backgrounds and that of the next person. I don’t think the hyphenated American version of culture is going to cut it here where many people are hardly 1 generation removed from the real thing, if that. And there is far less pressure to move toward a homogenized culture than there is on the mainland so even after a couple generations, an awareness of the real McCoy may not fade.

I will keep folks apprised of what develops and how many people throw things at me out of frustration. I mean I get taxed by my own government all the time, I am used to it. It is just not a part of the American experience I would choose to share with visitors.

Fine, Spend Lots of Money

by:

Joe Patti

One of the many things I am doing these days is trying to arrange for hotel rooms for the many performers who will be appearing on stage over the course of the next year. I figured, since I have 100 people needing about 60 rooms over the course of about 30 dates, I might be able to get a good rate. Wrong. This is partly because the economies of Japan and the US are improving enough that people are traveling and there aren’t enough rooms to be had.

However, I also can’t get a good rate because of the hoops I have to jump through to get it. I could actually get some very excellent rates via a hotel broker (a savings of $30 a night per room and considering I need 10-11 rooms on average…)–the only problem is I need a credit card to do it, but the university system isn’t set up with coorporate credit accounts, etc.

I know this is essentially the trade off in working for a university–you don’t have to fear going bankrupt as much, but the fastest you can make a decision is 3 weeks. I also know there are good reasons not to give state employees access to easy credit. However, given that so many transactions are taking place on the internet, state institutions are going to be left behind and left out of the savings. (And god knows, the state could really do with watching what they spend.)

There is a thinly veiled metaphor in there somewhere about how any organization has to keep their policies and procedures fresh and reflective of the current business climate to avoid missing out on easy opportunities to save.

The situation places me in a tough position because I want to cut costs, but the best I can do is the lowest possible price I can get for a purchase order–not the lowest possible price.

The other lesson I am reminded of is the importance of internal communication and networking. Because I am new to the area and haven’t made a lot of contacts, I don’t know the decision makers to call to get a good rate for my substantial needs. Even when I try to get in a back door and talk to people in marketing and sales, I get intercepted by receptionists who direct me to reservations and those folks aren’t interested or empowered to talk about sponsorship opportunities, etc. which might reduce my costs.

Maybe I would be too much of a small fry for the hotel anyway. However, no one is directing me to a person who would make that decision. This is something of a cautionary tale that reminds me to empower my staff to make decisions without consulting me, but that I also must encourage them to bring proposals for interesting opportunities to my attention as well. 80% will probably be people who haven’t really thought through their proposal and have nothing to offer, but 10% might have something of potential to offer (even if they too haven’t though through their proposal.)

Then of course, there is the other 10% who are out and out crazy and are looking of a whole lot for nothing. Those are the folks you hope your staff sorts out before they get to you…(heh heh)