Loading...
HomeMy WebLinkAbout1999-306ORDINANCE NO 99- 30O AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE KIWANIS CLUB OF DENTON, TEXAS, INC FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the Mayor is hereby authorized to execute an agreement between the City of Denton and the Kiwanis Club of Denton, Texas, Inc for the payment and use of hotel tax revenue, under the terms and conditions contained in the agreement, a copy of which is attached hereto and made a part hereof SECTION II That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the 7th day of////�722� 1999 ATTEST, JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM AGREEMENT BETWEEN THE CITY OF DENTON AND KIWANIS CLUB OF DENTON, TEXAS, INC (CY2000) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation (the "CITY"), and the Kiwams Club of Denton, Texas, Inc, a legal entity incorporated on September 6,1939 under the laws of the State of Texas (the "CLUB") WHEREAS, Tex Tax Code §351 002 authorizes the CITY to levy by ordinance a municipal hotel occupancy tax ("hotel tax') not exceeding seven percent (7%) of the consideration paid by a hotel occupant, and WHEREAS, by ordinance, the CITY has provided for the assessment and collection of a municipal hotel occupancy tax in the City of Denton of seven percent (7%), and WHEREAS, Tex Tax Code §351 101(a) authorizes the CITY to use revenue from its municipal hotel occupancy tax to promote tourism and the convention and hotel industry by advertising and conducting solicitations and promotional programs to attract tourists and convention delegates or registrants to the municipality or its vicuuty, and the encouragement, promotion, improvement, and application of the arts including instrumental and vocal music, dance, drama, folk art, creative writing, architecture, design and allied fields, painting, sculpture, photography, graphic and craft arts, motion pictures, radio, television, tape and sound recording, and other arts related to the presentation, performance, execution, and exhibition of these major art forms, and WHEREAS, the CLUB is well equipped to perform those activities, and WHEREAS, Tex Tax Code §351 101(c) authorizes the CITY to delegate by contract with the CLUB, as an independent entity, the management and supervision of programs and activities of the type described hereinabove funded with revenue from the municipal hotel occupancy tax, NOW, THEREFORE, in consideration of the performance of the mutual covenants and promises contained herem, the CITY and the CLUB agree and contract as follows I. HOTEL TAX REVENUE PAYMENT 1.1 Consideration. For and in consideration of the activities to be performed by the CLUB under this Agreement, the CITY agrees to pay to the CLUB a portion of the hotel tax revenue collected by the CITY at the rates and in the manner specified herem (such payments by the CITY to the CLUB sometimes herem referred to as the "agreed payments" or "hotel tax funds") 1.2 Amount of Payments. (a) As used in this Agreement, the following terms shall have the following specific meanings (i) The term "hotel tax revenue" shall mean the gross monies collected and received by the City as municipal hotel occupancy tax at the rate of seven percent (7%) of the price paid for a room in a hotel, pursuant to Texas Tax Code 351 002 and City Ordinance Hotel tax revenue will include penalty and interest related to the late payments of the tax revenue by the taxpayer (n) The term "Collection penod" will mean the collection period for the CITY's fiscal year It will include hotel tax revenue due to the City for the relevant fiscal year and collected through the 22nd day of the month following the close of the relevant fiscal year (in) The tern "base payment amount" shall mean a net amount of money equal to the total hotel tax revenue collected by the CITY during any relevant period of time (a e , fiscal year or fiscal quarter), less (1) attorney and auditing costs incurred during such relevant period of time for costs of collection or auditing of hotel taxpayers Attorney and auditing costs include fees paid to attorneys or agents not in the regular employ of the CITY for which attorneys or agents effect compliance or collection of the hotel tax from taxpayers, and (2) court costs and other expenses incurred in litigation against or auditing of such taxpayers (iv) The tern "contract quarter" shall refer to any quarter of the calendar year in which this Agreement is in force Contract quarters will end on March 31s`, June 30in September 30 , and December 3l't of each contract year (b) In return for satisfactory performance of the activities set forth in this Agreement and all attachments hereto, the CITY shall pay to CLUB an amount of money in each contract year equal to the lesser amount of Two and One One -Hundredth of a percent (2 01%) of the annual base payment amount or the fixed contract amount of Twenty -Two Thousand Dollars ($22,000) This amount will be divided into quarterly payments equal to 25% of the annual fixed contract amount, unless the CITY can show with reasonable certainty that the annual base payment amount will be less than originally estimated for the fiscal year The fourth quarterly payment will represent 25% of the fixed contract amount or the unpaid remainder of 2 01% of the base payment amount, whichever is less Each quarterly payment is subject to receipt of unused funds from the prior contract period and the receipt of the required quarterly reports 13 Dates of Payments. (a) The term "quarterly payments" shall mean payments by the CITY to the CLUB of those amounts specified in 112, above, as determined by the hotel tax revenue collected (b) Each quarterly payment shall be paid upon receipt of the required reports and after the 25s' day following the last day of the contract quarter If quarterly financial and performance reports are not received within thirty (30) days of the end of the applicable contract quarter, the recipient may be held in breach of this Agreement The CITY may withhold the quarterly payment(s) until the appropriate reports are received and approved, which approval shall not unreasonably be withheld Page 2 14 Other limitations regarding consideration. (a) The funding of this project in no way commits the CITY to future funding of this program beyond the current contract period Any future funding is solely the responsibility of the CLUB (b) It is expressly understood that this contract in no way obligates the General Fund or any other monies or credits of the CITY (c) CITY may withhold further allocations if CITY determines that CLUB's expenditures deviate materially from their approved budget II USE OF HOTEL TAX REVENUE 21 Use of Funds. For and in consideration of the payment by the CITY to the CLUB of the agreed payments of hotel tax funds specified above, the CLUB agrees to use such hotel tax funds only for advertising and conducting solicitations and promotional programs to attract tourists and convention delegates or registrants to the mumcipality or its vicinity by the encouragement, promotion, improvement, and application of the arts including instrumental and vocal music, dance, drama, folk art, creative writing, architecture, design and allied fields, painting, sculpture, photography, graphic and craft arts, motion pictures, radio, television, tape and sound recording, and other arts related to the presentation, performance, execution, and exhibition of these major art forms, as authorized by TEx TAX CODE §351 101(a) (3) & (4) Funds for any calendar year which are unused by midnight December 31' of that year shall be refunded to CITY within thirty (30) days 2.2 Administrative Costs The hotel tax funds received from the CITY by the CLUB may be spent for day-to-day operations, supplies, salaries, office rental, travel expenses, and other administrative costs that are incurred directly in the performance by the CLUB of those activities specified m ¶2 1 above and are allowed by TEx TAX CODE §351 101(f) 2 3 Specific Restrictions on Use of Funds. (a) That portion of total administrative costs of the CLUB for which hotel tax funds may be used shall not exceed that portion of the CLUB's administrative costs actually incurred in conducting the activities specified in ¶2 1 above (b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct an activity the primary purpose of which is not directly related to the promotion of local tourism and the convention and hotel industry or the performance of the person's job in an efficient and professional manner III. RECORDKEEPING AND REPORTING REQUIREMENTS 31 Budget. (a) The CLUB shall prepare and submit to the City Manager of the CITY an annual budget (see Exhibit "A') as approved by the City Council for each calendar year, for such operations of the Page 3 CLUB in which the hotel tax fiends shall be used by the CLUB This budget shall specifically identify proposed expenditures of hotel tax funds by the CLUB In other words, the CITY should be able to audit specifically where the funds in the separate account relating to hotel tax funds will be expended The CITY shall not pay to the CLUB any hotel tax revenues as set forth in Section I of this contract during any fiscal year of tlus Agreement unless a budget for such respective fiscal year has been approved in writing by the Denton City Council authorizing the expenditure of funds Failure to submit an annual budget may be considered a breach of contract, and if not remedied is considered grounds for termination of tlus Agreement as stated in paragraph 4 2 (b) The CLUB acknowledges that the approval of such budget by the Denton City Council creates a fiduciary duty in the CLUB with respect to the hotel tax funds paid by the CITY to the CLUB under this Agreement The CLUB shall expend hotel tax funds only in the manner and for the purposes specified in this Agreement, TEx TAX CODE §351 101(a) and in the budget as approved by the CITY 32 Separate Accounts The CLUB shall maintain any hotel tax fiends paid to the CLUB by the CITY in a separate bank account with segregated accounting, such that any reasonable person can review the source of expenditures of tax funds A batik reconciliation report (see Exhibit `B") is required with each quarterly report 3.3 Financial Records. The CLUB shall maintain complete and accurate financial records of each expenditure of the hotel tax funds made by the CLUB These funds are required to be classified as restricted funds for audited financial purposes, and may not be used for supporting services, including, but not limited to, auditmg fees and attorney's fees Upon reasonably advance written request of the Denton City Council, the City Manager or designate, or any other person, shall make such financial records available for inspection and review by the party making the request CLUB understands and accepts that all such financial records, and any other records relating to this Agreement shall be subject to the Public Information Act, TEx GOv'T CODE, ch 552, as hereafter amended 3.4 Quarterly Reports. After initial receipt of hotel tax funds, and within thirty days after the end of every quarter thereafter, until all funds have been expended and reported to the CITY, CLUB shall furnish to CITY (1) a performance report of the work performed under this Agreement describing the activities performed pursuant to tlus Agreement during that contract quarter, and (2) a list of the expenditures made with regard to hotel tax funds pursuant to TEx TAX CODE §351 101(c) Both the performance and expenditure reports will be in a form either determined or approved by the City Manager or designate (see Exhibit "B") The CLUB shall respond promptly to any request from the City Manager of the CITY, or designate, for additional information relating to the activities performed under this Agreement 35 Notice of Meetings The CLUB shall give the City Manager of the CITY reasonable advance written notice of the time and place of all meetings of CLUB's Board of Directors, as well as any other meeting of any constituency of the CLUB at which this Agreement or any matter the subject of this Agreement shall be considered This provision shall not be deemed to require the CLUB to give notice of any executive session of the Executive Committee of the CLUB Page 4 IV TERM AND TERMINATION 4.1 Term. The term of this Agreement shall commence on January 1, 2000 and terminate at midnight on December 31, 2000 This term shall be a penod of one year 42 Termination Without Cause (a) This Agreement may be terminated by either party, with or without cause, by giving the other party sixty (60) days advance written notice (b) In the event this contract is terminated by either party pursuant to Section 4 2(a), the CITY agrees to reimburse the CLUB for any contractual obligations of the CLUB undertaken by the CLUB in satisfactory performance of those activities specified in ¶¶2 1 and 2 2 above and that were approved by the Council through the budget, as noted in ¶3 1 This reimbursement is conditioned upon such contractual obligations having been incurred and entered into in the good faith performance of those services contemplated in ¶12 1 and 2 2 above, and further conditioned upon such contractual obligations having a term not exceeding the full term of this Agreement Notwithstanding any provision hereof to the contrary, the obligation of the CITY to reimburse the CLUB or to assume the performance of any contractual obligations of the CLUB for or under any contract entered into by the CLUB as contemplated herein shall not exceed 66 2/3% of the current quarterly payment (c) Further, upon termination pursuant to ¶4 2(a), the CLUB will provide the CITY 1) Within 10 business days from the termination notification, a short-term budget of probable expenditures for the remaining 60 day period between termination notification and contract termination This budget will be presented to Council for approval within 10 business days after receipt by CITY If formal approval is not given within 10 business days and the budget does not contain any expenditures that would be prohibited by the Texas Tax Code, and is within the current contractual period approved budget, the budget will be considered approved, 2) Within 30 days, a full accounting of all expenditures not previously audited by the City, 3) Within 5 business days of a request from the CITY, a listing of expenditures that have occurred since the last required reporting period, 4) a final accounting of all expenditures and tax funds on the day of termination The CLUB will be obligated to return any unused funds or funds determined to be used improperly Any use of remaining funds by the CLUB after notification of termination is conditioned upon such contractual obligations having been incurred and entered into in the good faith performance of those services contemplated in 2 1 and 2 2 above, and further conditioned upon such contractual obligations having a term not exceeding the full term of this Agreement 43 Automatic Termination This Agreement shall automatically terminate upon the occurrence of any of the following events (a) The termination of the legal existence of the CLUB, (b) The insolvency of the CLUB, the filing of a petition in bankruptcy, either voluntarily or involuntarily, or an assignment by the CLUB for the benefit of creditors, Page 5 (c) The continuation of a breach of any of the terms or conditions of this Agreement by either the CITY or the CLUB for more than thirty (30) days after written notice of such breach is given to the breaching party by the other party, or (d) The failure of the CLUB to submit a financial quarterly report which complies with the reporting procedures required herem and generally accepted accounting principles prior to the beginning of the next contract term, or quarterly as required by Section 13 hereof 44 Right to Immediate Termination Upon Litigation Notwithstanding any other provision of this Agreement, to mitigate damages and to preserve evidence and issues for judicial determination, either party shall have the right to terminate this Agreement upon immediate notice to the other party in the event that any person has instituted litigation concerning the activities of the non -terminating party, and the terminating party reasonably believes that such activities are required or prohibited under this Agreement 45 In the event that this Agreement is terminated pursuant to ¶¶4 3 or 4 4, CLUB agrees to refund any and all unused funds, or funds determined by the CITY to have been used improperly, within 30 days after termination of this Agreement V GENERAL PROVISIONS 5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prolubit, nor be construed to prohibit, the agreement by the CLUB with another private entity, person, or organi- zation for the performance of those services described in ¶2 I above hi the event that the CLUB enters into any arrangement, contractual or otherwise, with such other entity, person or organization, the CLUB shall cause such other entity, person, or organization to adhere to, conform to, and be subject to all provisions, terms, and conditions of this Agreement and to TEx TAX CODE ch 351, including reporting requirements, separate funds maintenance, and limitations and prohibitions pertaining to expenditure of the agreed payments and hotel tax funds 52 Independent Contractor. The CLUB shall operate as an independent contractor as to all services to be performed under this Agreement and not as an officer, agent, servant, or employee of the CITY The CLUB shall have exclusive control of its operations and performance of services hereunder, and such persons, entities, or organizations performing the same and the CLUB shall be solely responsible for the acts and omissions of its directors, officers, employees, agents, and subcontractors The CLUB shall not be considered a partner or joint venturer with the CITY, nor shall the CLUB be considered nor in any manner hold itself out as an agent or official representative of the CITY 53 Indemnification The CLUB agrees to indemnify, hold harmless, and defend the CITY, its officers, agents, and employees from and against any and all claims or suits for injuries, damage, loss, or liability of whatever land or character, ansmg out of or in connection with the performance by the CLUB or those services contemplated by this Agreement, including all such claims or causes of action based upon common, constitutional or statutory law, or based, in whole or in part, upon allegations of negligent or intentional acts of CLUB, its officers, employees, agents, subcontractors, licensees and mvitees Page 6 54 Assignment. The CLUB shall not assign this Agreement without first obtaining the written consent of the CITY 55 Notice. Any notice required to be given under this Agreement or any statute, ordinance, or regulation, shall be effective when given in writing and deposited in the United States mail, certified mail, return receipt requested, or by hand -delivery, addressed to the respective parties as follows CITY City Manager City of Denton 215 E McKinney Denton, TX 76201 Denton Kiwanis Club, Inc Greg Sawko 1100 Dallas Drive, Suite 100 Denton, Texas 76205 5.6 Inurement. This Agreement and each provision hereof, and each and every right, duty, obligation, and liability set forth herein shall be binding upon and inure to the benefit and obligation of the CITY and the CLUB and their respective successors and assigns 5.7 Application of Laws. All terms, conditions, and provisions of this Agreement are subject to all applicable federal laws, state laws, the Charter of the City of Denton, all ordinances passed pursuant thereto, and all judicial determinations relative thereto 5.8 Exclusive Agreement. This Agreement contains the entire understanding and constitutes the entire agreement between the parties hereto concerning the subject matter contained herem There are no representations, agreements, arrangements, or understandings, oral or written, express or implied, between or among the parties hereto, relating to the subject matter of this Agreement, which are not fully expressed herem The terms and conditions of tlus Agreement shall prevail notwithstanding any variance in this Agreement from the terms and conditions of any other document relating to this transaction or these transactions 59 Duplicate Originals. This Agreement is executed in duplicate originals 5.10 Headings. The headings and subheadings of the various sections and paragraphs of this Agreement are inserted merely for the purpose of convenience and do not express or imply any limitation, definition, or extension of the specific terms of the section and paragraph so designated 5.11 Severability. If any section, subsection, paragraph, sentence, clause, phrase or word in this Agreement, or application thereof to any person or circumstance is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this Agreement, and the parties hereby declare they would have enacted such remaining portions despite any such invalidity 512 Insurance The CLUB shall provide insurance as follows 1 $500,000 Commercial General Liability, or $1,000,000 Event Insurance, covering all events taking place on City -owned property Page 7 2 Statutory Workers' Compensation and Employers' Liability ($100,0001$ 500,0001$100,000) The CITY must be named as an additional insured on all policies (except Workers' Compensation) and proof of coverage shall be submitted prior to any payment by the CITY EXECUTED this / 0day of L"% LP ) , 1999 ATTPRT ATTEST By Secretary P\ hmxAWept\WL\Ow Oacww W\Cmbxb\9M\ dM THE CITY OF DENTON, TEXAS CITY ATTORNEY DENTON KIWANIS Lo APPROVED AS TO LEGAL Page 8 Exhibit A Denton Kiwanis Club Budget Proposal Program Year 2000 Requested Advertising Fireworks July 4th Fireworks $ 20,000 Program/Advertising July 4th Fireworks 1 2,000 Total S 22,000 a a Exhibit B EXAMPLE FINANCIAL REPORT Program Year 2000 1ST 2ND 3RD 4TH BUDGET QUARTER QUARTER QUARTER QUARTER YEAR TO VS (Jan -Mar) (Apr -Jun) (Jul -Sep) (Oct -Dec) DATE ACTUAL $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000 0 0 0 0 0 0 0 0 0 0 0 500 0 0 0 0 0 500 0 0 0 0 0 500 0 0 0 0 0 500 0 0 0 0 0 1,000 0 0 0 0 0 1,000 0 0 0 0 0 1,000 0 0 0 0 0 1,000 0 0 0 0 0 1,000 0 0 0 0 0 1,000 0 0 0 0 0 0 01 0 0 0 0 0 0 0 0 0 0 0 0 1,000 0 1,000 0 10,000 0 0 0 0 0 0 0 0 Date Submitted Program Director