Theater finances set stage for grant controversy
WEST VALLEY CITY - Hale Centre Theatre proudly proclaims itself the most successful performing arts company in Utah - despite casts of amateur actors and an unhip suburban location.
Hale managers point to full houses at their taxpayer-built, $8 million high-tech theater and more than 200,000 tickets sold annually for what they bill as value-based, family-oriented entertainment.
Even if some in Utah's arts community find the Hale Centre's bragging a bit hyperbolic, the sales pitch found a receptive audience with politicians. In the final hours of this year's legislative session, lawmakers awarded the theater a $100,000 annual appropriation and $85,000 in one-time grants.
Even some legislators behind the unusual appropriation say they were unaware of one of the theater's key financial aspects: its top executives' big salaries. Together, the top five managers were paid $530,000 annually, according to the most recent public tax records.
Additionally, two top Hale officials own a leasing company the theater paid $500,000 in the past four years through an exclusive contract.
The windfall in taxpayer money came in the same session lawmakers turned down the Utah Arts Council's request for additional arts grants funding. The state agency distributes $1.3 million among some 227 arts groups through a long-established peer-review process, which considers applications for artistic quality and company stability, as well as geographic distribution and accessibility.
But Hale Theatre hasn't been shy in recent years about pursuing public money outside the established channel. The state funding comes in addition to county Zoo, Arts and Parks tax revenues the theater has received since it became a nonprofit agency in 1989. In 2006, Hale Theatre raked in $786,000 from Salt Lake County taxpayers.
There's no business like show business
A look at Hale's most recent tax records reveals the theater's four top executives each were paid more than $100,000 annually and provided with personal automobiles. That level of compensation is almost unheard of for administrators at Utah's professional theaters. Many producers say it is inappropriately high pay for leaders of a nonprofit community theater that relies on volunteers, contributions and taxpayer money.
"It's a huge disparity, what the top administrators are making as opposed to what artists are compensated," says Scott Phillips, director of the Utah Shakespearean Festival. "It's discouraging and not very fair in the eyes of the artistic world."
The actors who successfully audition for the 350 roles in Hale's well-attended productions are paid $30 to $60 per performance with no health benefits, according to Mark Dietlein, Hale president and CEO.
That contrasts sharply with the 18 Utah companies who have signed Actors' Equity agreements, which establish minimum salaries based on the number of performances and the size of the theater's regular audience, says Maria Somma, spokeswoman for the actors association. Minimum weekly wages range from $792 at the Shakespearean Festival and $728 at Pioneer Theatre Company, to $473 at Salt Lake Acting Company and $325 at Park City's Egyptian Theatre. Equity contracts also dictate health and pension benefits.
Dietlein says actors perform at Hale because they want to be a part of the "magic of theater."
"It's a wonderful thing," Dietlein says. "We literally get hundreds of people. They love the camaraderie. There is almost a family feeling among actors. It is a very tight group."
But camaraderie and magic only takes an artist so far, says actor Annette Wright, who decided to turn professional and join the actors' union after 15 years performing with Hale.
"I got to the point where a T-shirt and pie ain't going to cut it," Wright says. "I needed to make a living wage."
When people find out she's an actor, Colleen Baum says people always ask if she performs at Hale.
"I vehemently say, 'Absolutely not, because they don't pay their actors as real people. They pay their actors like little kids who mow the lawn in the neighborhood,' '' Baum says.
The pay's the thing
Members of Utah's broader arts community say the wide pay disparity between Hale's top administrators and actors indicates a cynical rejection of the tradition of non-profit community theater as a venue for amateurs who perform for their neighbors.
"You should pay commensurate salaries with the organizations you draw parallels to," says Jerry Rapier, producing director of Plan-B Theatre, who makes $25,000 a year and is the company's only full-time employee. "I don't understand why actors can make more working at Plan-B than they can at Hale, when our budget is $300,000 to $500,000 per year and theirs is $4 million."
Another professional Utah arts company, Repertory Dance Theatre, tries to make a statement with its salary structure. The average of staff and dancers' hourly salaries are comparable, says artistic director Linda Smith, although administrators work more weeks. The company also chooses to pay dancers' health benefits year-round. "We scrutinize our budgets, our expenditures, very carefully," Smith says. "Using public money, I think we have to be extremely responsible to taxpayers."
And at Pioneer, Utah's oldest professional company, which produces seven shows a year on a comparable budget to Hale's, artistic director Charles Morey will earn $94,432 this year, with no additional stipends for directing or playwriting royalties. Managing director Chris Lino will earn $74,206; neither have company cars. To direct the Utah Shakespearean Festival, the state's largest professional company with an annual budget of $6.3 million, Phillips makes $63,000.
Hale treasurer Kent Collins says the board considers executive compensation every year. "It is very well considered and hotly debated," Collins says. "I don't make any excuse for what they are making, they are essential to this theater and its mission. They probably deserve more."
Dietlein offered to lower executive compensation to $90,000 in 2002 when it became an obstacle to ZAP funding. But 2003 tax records show he lowered his and his wife's pay to $97,250 and $95,750 respectively. By 2004 it had climbed back up to $105,500 for both, and the same for a third executive. By 2005, they were paid $110,000 each. Collins says the increases were cost of living adjustments.
Utah House Budget Chairman Ron Bigelow, R-West Valley City, said he pushed for the ongoing grant to the Hale Centre because it provides family-oriented entertainment. He said he was unaware of the Hale executives' compensation - despite their disclosure in public tax records - and acknowledged "it is a concern."
Sen. Pat Jones, D-Holladay, who is a Hale Centre Theatre board member along with such notables as Attorney General Mark Shurtleff, says she is proud of the wholesome entertainment the theater offers and often takes her grandchildren to performances. But Jones also said she was unaware of the executives' compensation package.
The Hale top executives supplement their income by running a for-profit leasing business that deals only with their own nonprofit theater. Chief executive Mark Dietlein and his wife Sally, who is executive producer, own Red Rock Leasing LLC, a private company that Hale Centre pays $132,000 annually for stage sets and props, according to financial documents.
The arrangement doesn't show up on Hale's public tax documents. In a section for reporting independent contractors, Hale reports "none." The deal was disclosed in documents submitted to the county for ZAP funding.
Speaking generally about nonprofit management, Bruce Olson, lawyer with Ray, Quinney & Nebeker, says such private benefit arrangements should raise a red flag to board members. "It raises questions for more scrutiny," he says.
Even when good reasons exist for such transactions, he said, boards should consider the "appearance issues" for organizations that depend upon the public's goodwill.
Collins and Dietlein say Hale's payment to Red Rock is below the market rates for set and prop services, making the arrangement a good deal for the theater company.
Bigelow says the funding, like all such grants, will be re-examined next year. "There are some issues I have with every funding bill - are the funds used in an appropriate way?" Bigelow says. "Sounds like this is one that I will keep personal track of."
Hale Centre Theatre executives' pay
* MARK DIETLEIN, president and CEO, $110,000
* SALLY DIETLEIN, executive producer, $110,000
* SALLY HALE RICE, executive producer, $110,000
* ANDREW BARRUS, technical director, $105,000
* BRENT LANGE, vice president development, $96,000
* U.S. AVERAGE, for top administrator at theaters with similar budgets, $88,000
Sources: Hale's 2005 IRS Tax Form (the most recent available), Theatre Communications Group Salary Survey 2007
Legislature's funding for Hale Theatre
* $100,000 annual appropriation
* $35,000 one-time grant
* $50,000 one-time grant for
Hale's Orem theater
* HALE CENTRE THEATRE: $30 to $60 per performance
* UTAH SHAKESPEAREAN FESTIVAL: $792 per week
* PIONEER THEATRE CO.: $728
* SALT LAKE ACTING CO.: $473
* PARK CITY EGYPTIAN THEATRE: $325
Sources: Hale Theatre and Actors Equity Association