HomeMy WebLinkAbout1998-421ORDINANCE NO 9�-� /
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE NORTH TEXAS STATE FAIR 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 North Texas State Fair 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 04 day of�/�/%?/C/
1998
JACI I ER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
AGREEMENT BETWEEN THE CITY OF DENTON AND
NORTH TEXAS STATE FAIR (CY1999-2001)
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 North Texas State Fair, a non-profit corporation, incorporated under the laws
of the State of Texas (the "FAIR")
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 (70/o), 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 vicinity, and
WHEREAS, the FAIR is well equipped to perform those activities, and
WHEREAS, Tex Tax Code §351 101(c) authorizes the CITY to delegate by contract with
the FAIR, as an independent entity, the management and supervision of programs and activities of
the type described heremabove funded with revenue from the mumcipal hotel occupancy tax,
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, the CITY and the FAIR 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 FAIR
under this Agreement, the CITY agrees to pay to the FAIR a portion of the hotel tax revenue
collected by the CITY at the rates and in the manner specified herein (such payments by the CITY
to the FAIR sometimes herein referred to as the "agreed payments" or "hotel tax funds")
12 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 period" 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 term "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 (i 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 term "contract quarter" shall refer to any quarter of the calendar year in
which this Areement is in force Contract quarters will end on March 31s`, June 30',
September 30 , and December 31" 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 FAIR an amount of money in each contract
year equal to the lesser amount of Nine and Eighty -Two One Hundredths percent (9 82%) of the
annual base payment amount or the fixed contract amount of Eighty-one Thousand Six Hundred
Two Dollars ($81,602) 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
9 82% 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 Funding for calendar year 2000 and calendar year 2001 is dependent upon, and subject to,
budget approval by the City Council for those periods Upon, and subject to, budget approval, the
budgeted annual payment for calendar years 2000 and 2001 are subject to an annual escalation of
not morethan 4%
1.3 Dates of Payments.
(a) The term "quarterly payments" shall mean payments by the CITY to the FAIR of those
amounts, specified in ¶1 2, 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
1.4 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
FAIR
(b) It is expressly understood that this contract in no way obligates the General Fund or any
other moues or credits of the CITY Further, FAIR understands that funding for the CY2000 and
CY 2001 � years is expressly contingent upon the availability and allocation of budgeted hotel tax
funds during CITY's FY1999-2000 and FY2000-2001 budget years, respectively
(c) CITY may withhold further allocations if CITY determines that FAIR's expenditures
deviate materially from their approved budget
II. USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and in consideration of the payment by the CITY to the FAIR of the agreed
payments of hotel tax funds specified above, the FAIR agrees to use such hotel tax funds only for
advertising and conducting solicitations and promotional programs to attract tourists and convention
delegates I or registrants to the municipality or its vicinity„ as authorized by nx TAX CODE
§351 101(a) Funds for any calendar year which are unused by midnight December 3 1 " 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 FAIR may be spent
for day-td-day operations, supplies, salaries, office rental, travel expenses, and other administrative
costs that lare incurred directly in the performance by the FAIR of those activities specified in ¶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 FAIR for which hotel tax funds may
be used shall not exceed that portion of the FAIR'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
3.1 Budget.
( The FAIR shall prepare and submit to the City Manager of the CITY an annual budget
(see Exln xt "A") as approved by the City Council for each calendar year, for such operations of the
FAIR in Which the hotel tax funds shall be used by the FAIR This budget shall specifically identify
proposed expenditures of hotel tax funds by the FAIR 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
Page 3
expended The CITY shall not pay to the FAIR any hotel tax revenues as set forth in Section I of
this contract during any fiscal year of this 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 this Agreement as stated in paragraph 4 2
(b) The FAIR acknowledges that the approval of such budget by the Denton City
Council creates a fiduciary duty in the FAIR with respect to the hotel tax funds paid by the CITY to
the FAIR under this Agreement The FAIR 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
3.2 Separate Accounts. The FAIR shall maintain any hotel tax funds paid to the FAIR 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 bank reconciliation report (see Exhibit "B") is
required with each quarterly report
33 Financial Records. The FAIR shall maintain complete and accurate financial records of
each expenditure of the hotel tax funds made by the FAIR 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, auditing 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 FAIR
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. Within thirty days after the end of every contract quarter, FAIR shall
furnish to CITY (1) a performance report of the work performed under this Agreement describing
the activities performed pursuant to this 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 FAIR 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
3.5 Notice of Meetings. The FAIR shall give the City Manager of the CITY reasonable
advance written notice of the time and place of all meetings of FAIR's Board of Directors, as well
as any other meeting of any constituency of the FAIR at which this Agreement or any matter the
subject of this Agreement shall be considered Ms provision shall not be deemed to require the
FAIR to give notice of any executive session of the Executive Committee of the FAIR
IV TERM AND TERMINATION
41 Term. The term of this Agreement shall commence on January 1, 1999 and terminate at
midnight on December 31, 2001 This term shall be a period of three years
Page 4
4.2 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 FAIR for any contractual obligations of the FAIR undertaken
by the FAIR 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 ¶¶2 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 FAIR or to assume the performance of any contractual obligations of the FAIR for or under
any contract entered into by the FAIR as contemplated herein shall not exceed 66 2/3% of the
current quarterly payment
(c) Further, upon termination pursuant to 14 2(a), the FAIR 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 FAIR will be obligated to return any unused funds or funds determined to be
used improperly Any use of remaining fiends by the FAIR 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 FAIR,
(b) The insolvency of the FAIR, the filing of a petition in bankruptcy, either voluntarily or
involuntarily, or an assignment by the FAIR for the benefit of creditors,
(c) The continuation of a breach of any of the terms or conditions of this Agreement by
either the CITY or the FAIR for more than thirty (30) days after written notice of such
breach is given to the breaching party by the other party, or
Page 5
(d) The failure of the FAIR to submit a financial quarterly report which complies with the
reporting procedures required herein and generally accepted accounting principles prior to
the beginning of the next contract term, or quarterly as required by Section 13 hereof
4.4 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 tins Agreement upon immediate
notice to the other party in the event that any person has instituted litigation concerning the
activities of the non-ternimating party, and the terminating parry reasonably believes that
such activities are required or prolubited under this Agreement
45 In the event that this Agreement is terminated pursuant to ¶¶4 3 or 4 4, FAIR 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
VAIEel s1►1 ai;743 M "111&11$) 6M
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prolubit, nor
be construed to prohibit, the agreement by the FAIR with another private entity, person, or organi-
zation for the performance of those services described in 12 1 above In the event that the FAIR
enters into any arrangement, contractual or otherwise, with such other entity, person or organization,
the FAIR shall cause such other entity, person, or organization to adhere to, conform to, and be
subject to all provisions, terms, and conditions of tlus 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 FAIR 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 FAIR shall have exclusive control of its operations and performance of services
hereunder, and such persons, entities, or organizations performing the same and the FAIR shall be
solely responsible for the acts and omissions of its directors, officers, employees, agents, and
subcontractors The FAIR shall not be considered a partner or joint venturer with the CITY, nor
shall the FAIR be considered nor in any manner hold itself out as an agent or official representative
of the CITY
53 Indemnification. The FAIR 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 kind or character, ansing out of or in connection with the performance
by the FAIR 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 FAIR, its officers, employees, agents, subcontractors,
licensees and invitees
54 Assignment. The FAIR shall not assign tins Agreement without first obtaining the written
consent of the CITY
Page 6
55 Notice. Any notice required to be given under tlus Agreement or any statute, ordinance, or
regulation}, shall be effective when given in writing and deposited in the United States mail, certified
marl, return receipt requested, or by hand -delivery, addressed to the respective parties as follows
City Manager
City of Denton
215 E McKinney
Denton, TX 76201
t
North Texas State Fair Association
James Roden
Executive Director
P O Box 1695
Denton, Texas 76202-1695
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 FAIR 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 herein
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 tlus Agreement,
which are not fully expressed herein The terms and conditions of this 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
5.9 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
511 SRverability. 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
5.12 Insurance. The FAIR shall provide insurance as follows
$500,000 Commercial General Liability
Statutory Workers' Compensation
($ 100,000/$500,000/$l 00,000)
$500,000 Business Automobile Liability
vehicles
and Employers' Liability
on any owned, non -owned or hired
Page 7
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 tlus 0#day of k"—d�z / , 1998
ATTEST
By W
J TIFER PALTERS,
CI SECRETARY
0491030
By
Secretary
F VhuaMepPL Mw Uo .i \Con \98WOTC n=WFW d.
THE CITY OF DENTON, TEXAS
C �,��LIL
r. tYOR
APPROVED AS TO LEGAL)FORM
i
HE T L PR
CITY ATTO Y
NORTH T S STATE FAIR
By
APPROVED AS TO LEGAL FORM
Page 8
To Jorge Trevino From Karla Sikes 382-7763 10/20/98 15 09 16 Page 2 of 2
North Texas State Fair Budget (Revised)
FY 98-99
Adverhsnta Amount
Pnntmg 15,000
Advertising 25,000
Postage 2,000
Telephone 3,500 45,500
Admu4csdratwn
Salanes
26,102
Operating
Utilities
5,000
Office Supplies
1,000
Equip Maint
500
Services
Audit
1,500
Equipment
Office Equip
2,000 36,102
Total 81,602
Y OF DFNTON
1AX DEPARiMEN?
NORTH TEXAS STATE FAIR
FINANCIAL REPORT
Program Year1999
1ST
2ND
3RD
4TH
QUARTER
QUARTER
QUARTER
QUARTER YEAR TO
BUDGET VS
(Jan -Mar)
(Apr -Jun)
(Jul -Sep)
(Oct -Dec) DATE
ACTUAL
$0
$0
$0
$0 $0
$0
$0
$0
$0
$0 $0
$81,602
0
0
0
0 0
0
$0
$0
$0
$0
$0
$15,000
0
0
0
0
0
25,000
0
0
0
0
0
2,000
0
0
0
0
0
3.500
$0
$0
$0
$0
$0
$26,102
0
0
0
0
0
5,000
0
0
0
0
0
1,000
0
0
0
0
0
500
0
0
0
0
0
1,500
$0 $0 $0 $0 $0 $81,602
Date Submitted Program Director
NORTH TEXAS STATE FAIR
FINANCIAL REPORT
Program Year 1999
1ST
2ND
3RD
4TH
QUARTER
QUARTER
QUARTER
QUARTER YEAR TO
BUDGET VS
(Jan -Mar)
(Apr -Jun)
(Jul -Sep)
(Oct -Dec) DATE
ACTUAL
$0
$0
$0
$0 $0
$0
$0
$0
$0
$0 $0
$81,602
0
0
0
0 0
0
�ae i Ip/
1
/
/
1
1
25.000
1
1
1
1
1
2 111
,..11
1
1
1
1
1
3,50
11
11
'• 1
$0
$0
$45.511
4
11
11
'•1
'•1
'•1
1
kl/
1
1
1
1
/
5,000
500
1
1
1
1
1
aa.
a 0 f
1
1
1
1
1
1,500
1
1
1
1
1
111
a f
$0'•1
so'�/
so1
$0
$0
11
$0
11
$81.602
Date Submitted Program Director
NORTH TEXAS STATE FAIR
FINANCIAL REPORT
Program Year1999
1ST
2ND
3RD
4TH
QUARTER
QUARTER
QUARTER
QUARTER
YEAR TO
BUDGET VS
APPROVED BUDGET
(Jan -Mar)
(Apr -Jun)
(Jul -Sep)
(Oct -Dec)
DATE
ACTUAL
Beginning Cash
$0
$0
$0
$0
$0
$0
Receipts
Occupancy Tax
$81,602
$0
$0
$0
$0
$0
$81,602
Interest Income
0
0
0
0
0
0
0
Total Rsoeh*
liBl,W2
$0
$0
$0
$0
$0
$81,602
DteWursements
Admalaho
Printer
$15000
$0
$0
$0
$0
$0
$15,000
Advefting
25,000
0
0
0
0
0
25,000
Postwe
2000
0
0
0
0
0
2,000
T0100hone
3,500
0
0
0
0
0
3,500
$0
$0
$0
$0
$0
$45,500
Toted Ardvertising $45.500
Adminftmoo
Belarles
$26,102
$0
$0
$0
$0
$0
$26,102
O
UNIM"
6,000
0
0
0
0
0
5,000
Office Supplies
1,000
0
0
0
0
0
1,000
Equip Muirrt.
500
0
0
0
0
0
500
swykea
AWN
15DD
0
0
0
0
0
1,500
Won Equipment
2,000
0
0
0
0
0
2,000
$0
$0
$0
$0
$0
$36,102
Total Administration $36,102
ToW Dlebursomerda
$81,6m
$0
$0
$0
$0
$0
$81,602
Exc em of
RecelptsAWsbursements
$0
$0
$0
$0
$0
$0
"Ing, Cash
$0
$0
0
$0
$0
$0
I�ttilrtCU.IATIOdd
Cash an Hand
$0
$0
$0
$0
$0
$0
Laos Outstanding Cheoks
0
0
0
0
0
0
Other Adlustments
0
0
0
0
0
0
0
0
$0
0
0
0
Bank Balance
Date Submitted Program Director