HomeMy WebLinkAbout25-2336
Texas Filmmakers HOT Funds, PY2026 - Page 1
AGREEMENT BETWEEN THE CITY OF DENTON AND THE TEXAS FILMMAKERS
CORPORATION (PROGRAM YEAR 2026) 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 Texas Filmmakers Corporation, a non-profit corporation incorporated under the
laws of the State of Texas (the “ORGANIZATION”).
WHEREAS, TEX. TAX CODE §351.002 authorizes 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, 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 CITY to use revenue from its municipal
hotel occupancy tax only 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, ORGANIZATION is well equipped to perform those activities; and
WHEREAS, TEX. TAX CODE §351.101(c) authorizes CITY to delegate by contract with
ORGANIZATION; 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 herein, CITY and ORGANIZATION agree, and contract as follows:
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and in consideration of the activities to be performed by
ORGANIZATION under this Agreement, CITY agrees to pay to ORGANIZATION a portion of the
Hotel Tax Revenue collected by CITY at the rates and in the manner specified herein (such payments
by CITY to ORGANIZATION sometimes herein referred to as the “Agreed Payments” or “Hotel
Tax Funds”).
1.2 Definitions.
(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 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
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 2
payments of the tax revenue by the taxpayer. The collection period of the CITY’s fiscal
year 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.
(ii) The term “Base Payment Amount” shall mean a net amount of money equal
to the total Hotel Tax Revenue collected by 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 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.
(iii) The term “Contract Quarter” shall refer to any quarter of the calendar year in
which this Agreement is in force. Contract quarters will end on March 31st, June 30th,
September 30th, and December 31st of each contract year.
(iv) The term “Tourism” as used in this Agreement means attracting individuals to
travel from a residence outside the City of Denton to Denton for business, pleasure, recreation,
education, or culture that promotes the convention and hotel industry.
(b) In return for satisfactory performance of the activities set forth in this Agreement
and all attachments hereto, CITY shall pay to ORGANIZATION an amount of money in each
contract year equal to the lesser amount of: one and ninety-one hundredths percent (1.91%) of the
annual Base Payment Amount, or the fixed contract amount of Seventy-Five Thousand Dollars
($75,000). This amount will be paid in one lump sum equal to 100% of the Contract Amount,
unless CITY can show with reasonable certainty that the annual Base Payment Amount will be
less than originally estimated for the fiscal year, and will be the unpaid remainder of the 1.91% of
the Base Payment Amount, whichever is less.
(c) If CITY’s Chief Financial Officer determines that hotel tax receipts by the CITY
are not meeting the anticipated budget projection, CITY may reduce the ORGANIZATION’s
current budget at any time during the contract period. Each quarterly payment is subject to
immediate refund upon request by the CITY for any unused or improperly expended funds, .
1.3 Dates of Payments.
(a) The lump sum payment will be on or after the 25th day of January 2026, upon receipt
and closeout of any prior year agreement reports.
(b) The term “quarterly payments” shall mean payments by CITY to ORGANIZATION
of those amounts specified in Section 1.2, above, as determined by the Hotel Tax Revenue collected.
(c) If any quarterly financial report is not received within thirty (30) days of the end of
the applicable Contract Quarter, the recipient may be held in breach of this Agreement. CITY may
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 3
withhold the payment(s) until the appropriate reports are received and approved, which approval shall
not be unreasonably withheld.
1.4 Other limitations regarding consideration.
(a) The funding of this project in no way commits CITY to future funding of this program
beyond the current contract period. Any future funding is solely the responsibility of
ORGANIZATION.
(b) It is expressly understood that this contract in no way obligates the General Fund or
any other monies or credits of CITY.
(c) CITY may withhold further allocations if CITY determines that ORGANIZATION’s
expenditures deviate materially from their approved budget.
II. USE OF HOTEL TAX REVENUE
2.1 Use of Funds.
(a) For and in consideration of the payment by CITY to ORGANIZATION of the Agreed
Payments of Hotel Tax Funds specified above, ORGANIZATION agrees to use such Hotel Tax
Funds only for (1) advertising and conducting solicitations and promotional programs to attract
tourists and convention delegates or registrants to the municipality or its vicinity, as well as the
promotion of Tourism through 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 arts forms,, as authorized by TEX. TAX CODE §351.101(a)(4).
Funds for any calendar year which are unused by midnight December 31st of that year shall be
refunded to CITY within thirty (30) days.
(b) Advertising materials purchased with the hotel occupancy tax funds must be targeted
to reach audiences outside the Denton city limits. These materials include, but are not limited to, signs,
posters, postcards, newsletters, print advertising, digital marketing, billboards, radio and television.
2.2 Administrative Costs. The Hotel Tax Funds received from CITY by ORGANIZATION
may be spent for day-to-day operations, office supplies, salaries, travel expenses and other
administrative costs allowed by TEX. TAX CODE §351.101(e), but only if: (i) specified in
ORGANIZATION’s budget attached hereto as Exhibit “A” and incorporated herein for all purposes;
and (ii) each such expenditure is directly attributable to work on programs which promote Tourism
and the hotel and convention industry; and (iii) promotes at least one of the six statutory purposes
enumerated within TEX. TAX CODE §351.101(a).
2.3 Specific Restrictions on Use of Funds.
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 4
(a) ORGANIZATION agrees to demonstrate strict compliance with the record keeping
and apportionment limitations imposed by TEX. TAX CODE §351.101(f) and §351.108 (c) and (d).
ORGANIZATION shall not utilize Hotel Tax Funds for any expenditure, which has not been
specifically documented to satisfy the purposes set forth in Sections 2.1 and 2.2 above.
(b) Hotel Tax Funds may not be spent for travel for a person to attend an event or conduct
an activity except where such travel is directly related to the performance of the person’s job in an
efficient and professional manner and the primary purpose of which is directly related to the
promotion of local Tourism and the convention and hotel industry.
(c) City’s standard HOT Funding contract terms, including use of the funds only for
events, festivals and shows that attract overnight tourists to the city, and not for use of direct
funding of operations that do not serve the Tourism purpose of HOT funds, and including
reporting requirements.
(d) ORGANIZATION to review rental rates, sponsorships, and memberships for
additional revenue.
III. RECORDKEEPING, REPORTING & ADDITIONAL REQUIREMENTS
3.1 Budget.
(a) ORGANIZATION shall adhere to the budget (Exhibit “A”) as approved by the City
Council for each calendar year, for all operations of ORGANIZATION in which the Hotel Tax Funds
shall be used by ORGANIZATION. The CITY may audit specifically the purpose of each individual
expenditure of Hotel Tax Funds from the separate account relating to Hotel Tax Funds. CITY shall
not pay to ORGANIZATION any Hotel Tax Revenues as set forth in Section I of this contract during
any program year of this Agreement unless a budget for such respective program year has been
approved in writing by the Denton City Council, authorizing the expenditure of funds.
(b) ORGANIZATION acknowledges that approval of the budget (Exhibit “A”) by the
Denton City Council creates a fiduciary duty in ORGANIZATION with respect to the Hotel Tax
Funds paid by CITY to ORGANIZATION under this Agreement. ORGANIZATION 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 CITY.
(c) Upon the application or consent of ORGANIZATION, the City Manager or their
designee may authorize minor amendments to the approved budget as necessary to carry out the intent
of this Agreement, in a manner consistent with efficient use of public funds, and in accordance with
State law. Such minor amendments may not increase the overall funding set forth in Section 1.2(b),
extend the term, or otherwise alter the performance obligations of ORGANIZATION, without
approval of the City Council by ordinance.
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 5
3.2 Separate Accounts. ORGANIZATION shall maintain any Hotel Tax Funds paid to
ORGANIZATION by CITY in a separate account or with segregated fund accounting, such that any
reasonable person can ascertain the revenue source of any given expenditure.
3.3 Financial Records. ORGANIZATION shall maintain complete and accurate financial
records of each expenditure of the Hotel Tax Funds made by ORGANIZATION. These funds are
required to be classified as restricted funds for audited financial purposes, and may not be used for
contracted services, including, but not limited to, auditing fees or attorney fees. Upon reasonable
advance written request of the Denton City Council, the City Manager or their designee, or any other
person, ORGANIZATION shall make such financial records available for inspection and review by
the party making the request. ORGANIZATION understands and accepts that all such financial
records, and any other records relating to this Agreement shall be subject to the Texas 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 (30) days
after the end of every Contract Quarter, ORGANIZATION shall furnish to CITY: (1) a completed
financial report, (2) a list of the expenditures or copies of the invoices or receipts made with regard to
Hotel Tax Funds pursuant to TEX. TAX CODE §351.101(c), social media and/or digital marketing
expenditures require invoices to be provided and shall include performance measures, and (3) a copy
of all financial records (e.g., copies of front and back cleared checks or bank statements, and other
relevant documentation). ORGANIZATION shall prepare and deliver all reports in a form and
manner approved by the City Manager or their designee. ORGANIZATION shall respond promptly
to any request from the City Manager of CITY, or their designee, for additional information relating
to the activities performed under this Agreement.
3.5 Notice of Meetings. ORGANIZATION shall give the City Manager of CITY, or their
designee, reasonable advance written notice of the time and place of all meetings of
ORGANIZATION’s Board of Directors, as well as any other meeting of any constituency of
ORGANIZATION, at which this Agreement or any matter subject to this Agreement shall be
considered.
3.6 Other Sources of Support Funds. ORGANIZATION shall perform its best efforts to
review rental rates, ORGANIZATION sponsorships and memberships to raise additional revenue
to support the existing ORGANIZATION programs and the Public Art program.
IV. TERM AND TERMINATION
4.1 Term. The term of this Agreement shall commence on January 1, 2026, and terminate at
midnight on January 31, 2027. However, the program period shall commence on January 1, 2026,
and terminate at midnight on December 31, 2026. Only those expenditures authorized by Chapter
351 of the Texas Tax Code and the program guidelines, which are actually incurred during the
program period, for events and activities taking place within the program period, are eligible for
funding under this Agreement, and any ineligible expenditures unspent funds shall be forfeited to
CITY upon termination of this Agreement.
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 6
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),
CITY agrees to reimburse ORGANIZATION for any contractual obligations undertaken by
ORGANIZATION in satisfactory performance of those activities specified in Sections 2.1 and 2.2
above, and that were approved by the Council through the budget, as noted in Section 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 Sections 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
CITY to reimburse ORGANIZATION, or to assume the performance of any contractual
obligations of ORGANIZATION, for or under any contract entered into by ORGANIZATION as
contemplated herein, shall not exceed 66 2/3% of the current quarterly payment.
(c) Further, upon termination pursuant to Section 4.2(a), ORGANIZATION will provide
CITY: 1) within ten (10) business days from the termination notification, a short-term budget of
probable expenditures for the remaining sixty (60) day period between termination notification
and contract termination. This budget will be presented to Council for approval within ten (10)
business days after receipt by CITY. If formal approval is not given within ten (10) business days,
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 thirty (30) days, a full accounting of all expenditures not previously audited by CITY; 3)
within five (5) business days of a request from 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. ORGANIZATION will be obligated to return any unused funds and funds
used in violation of this Agreement or the Texas Tax Code. Any use of remaining funds by
ORGANIZATION 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 Sections 2.1 and 2.2 above, and further conditioned upon such contractual
obligations having a term not exceeding the full term of this Agreement.
4.3 Automatic Termination. This Agreement shall automatically terminate upon the occurrence
of any of the following events:
(a) The termination of the legal existence of ORGANIZATION;
(b) The insolvency of ORGANIZATION, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an assignment by ORGANIZATION for the benefit of creditors;
(c) The continuation of a breach of any of the terms or conditions of this Agreement by either
CITY or ORGANIZATION for more than thirty (30) days after written notice of such breach is given
to the breaching party by the other party; or
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 7
(d) The failure of ORGANIZATION 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 1.3 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 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.
4.5 In the event that this Agreement is terminated pursuant to Sections 4.3 or 4.4,
ORGANIZATION agrees to refund any and all unused funds, or funds determined by CITY to
have been used improperly, within thirty (30) days after termination of this Agreement.
V. GENERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor be
construed to prohibit, the agreement by ORGANIZATION with another private entity, person, or
organization for the performance of those services described in Section 2.1 above. In the event that
ORGANIZATION enters into any arrangement, contractual or otherwise, with such other entity,
person or organization, ORGANIZATION 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.
5.2 Independent Contractor. ORGANIZATION 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 CITY. ORGANIZATION shall have exclusive control of its operations and performance of
services hereunder, and such persons, entities, or organizations performing the same, and
ORGANIZATION shall be solely responsible for the acts and omissions of its directors, officers,
employees, agents, and subcontractors. ORGANIZATION shall not be considered a partner or joint
venture with CITY, nor shall ORGANIZATION be considered, nor in any manner hold itself out as,
an agent or official representative of CITY.
5.3 Indemnification. ORGANIZATION AGREES TO INDEMNIFY, HOLD
HARMLESS, AND DEFEND 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, ARISING OUT OF OR IN
CONNECTION WITH THE PERFORMANCE BY ORGANIZATION OF 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 ORGANIZATION, ITS OFFICERS,
EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES, OR ANY
FEES, FINES OR PENALTIES ASSESSED AGAINST CITY DUE TO MISUSE OF FUNDS
BY ORGANIZATION.
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 8
5.4 Assignment. ORGANIZATION shall not assign this Agreement without first obtaining the
written consent of CITY.
5.5 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
Sara Hensley
City Manager
CITY OF DENTON
215 E. McKinney
Denton, TX 76201
ORGANIZATION
Joshua Butler
President
TEXAS FILMMAKERS CORPORATION
1501 South Loop 288 Suite 104 PMB 147
Denton, TX 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 CITY and ORGANIZATION 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 this 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 may be 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.
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 9
5.12 Insurance. ORGANIZATION shall, at a minimum, provide insurance for the term of this
Agreement as follows:
1. $1,000,000 Commercial General Liability, or $1,000,000 Event Insurance, covering
all events taking place on City-owned property,
2. $500,000 Liquor/Dram Shop Liability for any event occurring on City-owned
property where alcohol will be provided or served, and
3. $500,000 Business Automobile Liability on any owned, non-owned or hired vehicles.
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 made to ORGANIZATION by CITY.
5.13 Incorporation. The recitals in the preamble of this Agreement are incorporated herein as if
fully set forth herein.
EXECUTED this _____ day of __________________________, 2026.
THE CITY OF DENTON, TEXAS
By: _____________________________
SARA HENSLEY,
CITY MANAGER
ATTEST:
INGRID REX, CITY SECRETARY
By: _____________________________
TEXAS FILMMAKERS CORPORATION
_________________________________
President
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
13th January
Texas Filmmakers HOT Funds, PY2026 - Page 10
THIS AGREEMENT HAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational obligations
and business terms.
_______________ s
SIGNATURE PRINTED NAME
s
TITLE
Finance
DEPARTMENT
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
By: _____________________________
Docusign Envelope ID: F3A307AA-2C00-474A-AF0E-BE7DAA45F62B
Matthew Hamilton
Interim Finance Director
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7
Texas Filmmakers HOT Funds, PY2026 - Page 11
Exhibit A
Texas Filmmakers Corporation
Thin Line Fest 2026
Hot Funds Budget 2026
Advertising
Advertising expenses $ 30,000
Printing and Copying 2,500
subtotal $ 32,500
Arts
Musical Performance Fees $ 8,750
Artist Accommodations 7,500
Film Licensing 3,500
Equipment Rental 2,500
Production Costs 1,500
Printing 3,000
Outside Contract Services 1,000
subtotal $ 27,750
Administrative
Administrative Expenses $ 750
Artists travel costs 2,500
Facility Rental 3,000
Wristbands 4,000
Supplies 1,500
Awards 3,000
subtotal $ 14,750
TOTAL $ 75,000
Docusign Envelope ID: 11C131E3-BE2D-4258-A5BD-5F06261DD1E7