Loading...
1999-302 O IN CENO AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON FESTIVAL FOUNDATION FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS ~ That the Mayor ~s hereby authorized to execute an agreement between the C~ty of Denton and the Denton Festival Foundation for the payment and use of hotel tax revenue, under the terms and eondmons contained m the agreement, a copy of which ~s attached hereto and made a part hereof SECTION II That th~s ordinance shall become effective lmmedmtely upon ~ts passage and approval PASSED AND APPROVED thls the 7~--/~ dayof ([~-~rj~/~ , 1999 JAC~LER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY ~ AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON FESTIVAL FOUNDATION (CY2000) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEMENT made between the City of Denton, Texas, a mumclpal corporation (the "CITY"), and the Denton Festival Foundatmn, Inca legal entity incorporated under the laws of the State of Texas (the '~FOUNDATION") WHEREAS, Tex Tax Code §351 002 authorizes the CITY to levy by ordinance a mumclpal hotel occupancy tax ("hotel tax') not exceechng seven percent (7%) of the consideration prod by a hotel occupant, and WHEREAS, by orchnance, the CITY has provided for the assessment and collection of a mumclpal hotel occupancy tax m the City of Denton of seven percent (7%), and WHEREAS, Tex Tax Code §351 101(a) authorizes the CITY to use revenue from ~ts munlmpal hotel occupancy tax to promote tourism and the convention and hotel mdustry by advertising and conducting sohc~tat~ons and promotuonal programs to attract tourists and convention delegates or registrants to the mamc~pahty or its mcunty, and WHEREAS, the FOUNDATION is well eqmpped to perform those act~wtles, and WHEREAS, Tex Tax Code §351 101(c) anthonzes the CITY to delegate by contract w~th the FOUNDATION, as an independent entity, the management and supervision of programs and act~wt~es of the type described heremabove funded voth revenue from the mumc~pal hotel occupancy tax, NOW, THEREFORE, m consideration of the performance of the mutual covenants and promises contained hereto, the CITY and the FOUNDATION agree and contract as follows I HOTEL TAX REVENUE PAYMENT 1 1 Consideration For and m consideration of the act~wt~es to be performed by the FOUNDATION under ti'ns Agreement, the CITY agrees to pay to the FOUNDATION a portion of the hotel tax revenue collected by the CITY at the rates and ~n the manner specffied herem (such payments by the CITY to the FOUNDATION somettmas hereto referred to as the "agreed payments" or "hotel tax funds") 1 2 Amount of Payments. (a) As used ~n tlus Agreement, the following terms shall have the following spemfic meanings 0) The term "hotel tax revenue" shall mean the gross momes collected and received by the C~ty as mummpal hotel occupancy tax at the rate of seven percent (7%) of the price prod for a mom m 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 (n0 The term "base payment mount" shall mean a net amount of money equal to the total hotel tax revenue collected by the CITY dunng any relevant period of time (t e, fiscal year or fiscal quarter), less (1) attorney and auchtmg costs incurred dunng such relevant period of tame for costs of collection or auditing of hotel taxpayers Attorney and audxtang costs mclude fees paid to attorneys or agents not m the regular employ of the CITY for which attorneys or agents effect eomphance or collection of the hotel tax fi.om taxpayers, and (2) court costs and other expenses incurred in litigation against or Inditing of such taxpayers 0v) The term "contract quarter" shall refer to any quarter of the calendar year in winch tins Agreement is m force Contract quarters will end on March 31st, June 30th, September 30t~, and December 31st of each contract year (b) In return for satisfactory perfomaance of the activities set forth ~n this Agreement and all attachments hereto, the CITY shall pay to FOUNDATION an amount of money in each contract year equal to the lesser amount of Slx and Tinrty-Elght One Hundredths percent (6 38%) of the annual base payment amount or the fixed contract amount of Seventy Thousand Dollars ($70,000) 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 remmnder of 6 38% 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 1 3 Dates of Payments. (a) The term "quarterly payments" shall mean payments by the CITY to the FOUNDATION of those amounts specified m ¶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 25th day following the last day of the contract quarter If quarterly financial and performance reports are not received wltlun tinrty (30) days of the end of the applicable contract quarter, the recipient may be held m breach of tls Agreement The CITY may withhold the quarterly payment(s) until the appropriate reports are received and approved, wbaeh approval shall not unreasonably be withheld Page 2 1 4 Other limitations regarding consideration. (a) The funchng of tins project m no way commits the CITY to future funding of ttus program beyond the current contract period Any future funding is solely the respuns~blhty of the FOUNDATION (b) It m expressly understood that tins contract m no way obligates the General Fund or any other momcs or crethts of the CITY (c) CITY may withhold further allocations if CITY deternunes that FOUNDATION's expenditures deviate materially from their approved budget II. USE OF HOTEL TAX REVENUE 2 1 Use of Funds. For and m consideration of the payment by the CITY to the FOUNDATION of the agreed payments of hotel tax funds specified above, the FOUNDATION agrees to use such hotel tax funds only for advertising and conducting sobc~tat~ons and promoUonal programs to attract tourists and convention delegates or regtstrants to the mumclpality or its mcunty as authorized by TEx TAX COOE §351 101(a) Funds for any calendar year which are unused by nudmght December 31st of that year shall be refunded to CITY w~tlun tturty (30) days 2.2 Administrative Costs The hotel tax funds received from the CITY by the FOUNDATION may be spent for day-to-day operations, supphes, salaries, office rental, travel expenses, and other admlmstrattve costs that are incurred d~rectly m the performance by the FOUNDATION of those activities specffied m ¶2 1 above and are allowed by TEx TAX Cooe §351 101(f) 2 3 Specffic Restrictions on Use of Funds. (a) That porttun of total admuustrat~ve costs of the FOUNDATION for wluch hotel tax funds may be used shall not exceed that port~on of the FOUNDATION's admunstrat~ve costs actually incurred m conducting the activities specified m ¶2 1 above (b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct an actlwty the primary purpose ofwtneh is not d~rectly related to the promotton of local tourism and the convention and hotel industry or the performance of the person's job m an efficient and professional manner IH. RECORDKEEPING AND REPORTING REQUIREMENTS 3.1 Budget. (a) The FOUNDATION shall prepare and submit to the City Manager of the CITY an annual budget (see Exlublt "A") as approved by the City Council for each calendar year, for such operations of the FOUNDATION m wtuch the hotel tax funds shall be used by the FOUNDATION This budget shall specifically identify proposed expenrhtures of hotel tax funds by the FOUNDATION In other words, the CITY should be able to audit specffically where the funds m the separate account relating to hotel tax funds will be expended The CITY shall not pay to the FOUNDATION any hotel tax revenues as set forth m Section I of tins contract dunng any fiscal Page 3 year of tht$ Agreement unless a budget for such mspect~ve fiscal year has been approved in writing by the Denton City Council authorizing the expenrhture of funds Fmlure to submit an annual budget may be considered a breach of contract, and if not remedied is considered grounds for termination of flus Agreement as stated in paragraph 4 2 (b) The FOUNDATION acknowledges that the approval of such budget by the Denton City Council creates a fiduciary duty m the FOUNDATION with respect to the hotel tax funds ptud by the CITY to the FOUNDATION under tins Agreement The FOUNDATION shall expend hotel tax funds only m the manner and for the purposes specified in flus Agreement, TEX TAX CODE §351 101 (a) and m the budget as approved by the CITY 3 2 Separate Accounts. The FOUNDATION shall maintain any hotel tax funds prod to the FOUNDATION by the CITY in a separate bank account with segregated accounting, such that any reasonable person can review the source of expenchtures of tax funds A bank reconcthatmn report (see Exhablt "B") is reqmred with each quarterly report 3 3 Financial Records. The FOUNDATION shall maintain complete and accurate financial records of each expenchture of the hotel tax funds made by the FOUNDATION These funds are requrred to be classified as restricted funds for audated financial purposes, and may not be used for supporting sevaces, including, but not hmlted 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 FOUNDATION understands and accepts that all such financial records, and any other records relating to flus Agreement shall be subject to the Public Informataon Act, TEx GOV'T CODE, ch 552, as hereafter amended 3.4 Quarterly Reports. Within thirty days after the end of every contract quarter, FOUNDATION shall furmsh to CITY (1) a performance report of the work performed under flus Agreement describing the activities performed pursuant to this Agreement dunng that contract quarter, and (2) a hst of the expenchtures 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 Extublt "B") The FOUNDATION shall respond promptly to any request t~om the City Manager of the CITY, or designate, for additional mformatton relattng to the acUwUes performed under flus Agreement 3 5 NOt,ce of Meetings. The FOUNDATION shall give the City Manager of the CITY reasonable advance written notme of the tune and place of all meetangs of FOUNDATION's Board of Directors, as well as any other meeting of any constituency of the FOUNDATION at wtuch flus Agreement or any matter the subject of flus Agreement shall be considered This promsion shall not be deemed to requrre the FOUNDATION to give notme of any executive session of the Executive Comrmttee of the FOUNDATION IV TERM AND TERMINATION 4 1 Term. The term of flus Agreement shall commence on January 1, 2000 and terminate at mldmght on December 31, 2000 Th~s term shall be a period of one year Page 4 4 2 Termination Without Cause. (a) Tins Agreement may be terminated by either party, with or w~thout cause, by glwng the other party sixty (60) days advance written notice (b) In the event flus contract as terminated by either party pursuant to SecUon 4 2(a), the CITY agrees to reimburse the FOUNDATION for any contractual obligations of the FOUNDATION undertaken by the FOUNDATION ~n satisfactory performance of those activities specified m ¶¶2 1 and 2 2 above and that were approved by the Cotmcfl through the budget, as noted in ¶3 1 This reimbursement as conditioned upon such contractual obhgataons having been incurred and entered into m the good faith performance of those services contemplated m ¶¶2 1 and 2 2 above, and further conditioned upon such contractual obhgat~ons hawng a term not exceeding the full term of this Agreement Notwithstanding any prowsaon hereof to the contrary, the obhgataon of the CITY to reimburse the FOUNDATION or to assume the performance of any contractual obhgataons of the FOUNDATION for or under any contract entered into by the FOUNDATION as contemplated herein shall not exceed 66 2/3% of the current quarterly payment (e) Further, upon termination pursuant to ¶4 2(a), the FOLrNDATION will provide the CITY 1) Within 10 business days from the termination notification, a short-term budget of probable expenthtures for the remaining 60 day period between termination notification and contract termination This budget will be presented to Council for approval within l0 bus~ness days after receipt by CITY If formal approval is not given w~thm l0 business days and the budget does not contain any expenthtures that would be prohibited by the Texas Tax Code, and is w~thin the current contractual period approved budget, the budget will be considered approved, 2) Within 30 days, a full accounting of all expenditures not previously Indited by the C~ty, 3) W~th~n 5 business days of a request from the CITY, a hsUng of expenditures that have occurred since the last required reporting period, 4) a final accounting of all expenthtures and tax funds on the day of termination The FOUNDATION will be obligated to return any unused funds or funds determined to be used improperly Any use of remaining funds by the FOUNDATION after notification of termination is conditioned upon such contractual obhgataons hawng been mcurred and entered into in the good faith performance of those services contemplated m 2 I and 2 2 above, and further conditioned upon such contractual obhgations having a term not exceethng the full term oftlus Agreement 4.3 Automatic Termination Tbas Agreement shall automatically terminate upon the occurrence of any of the following events (a) The terrmnataon of the legal existence of the FOUNDATION, (b) The msolvency of the FOUNDATION, the filing of a petition in bankruptcy, e~ther voluntarily or mvoluntanly, or an assignment by the FOUNDATION for the benefit of creators, (e) The continuation of a breach of any of the terms or conthtlons of this Agreement by e~ther the CITY or the FOUNDATION for more than thmy (30) days after written notice of such breach as gtven to the breaching party by the other party, or Page 5 (d) The failure of the FOUNDATION to submit a finanmal quarterly report winch comphes w~th the reporting procedures reqmred here~n and generally accepted accounting pnnc~ples prior to the begmmng of the next contract term, or quarterly as reqmred by Section 1 3 hereof 4 4 Right to Immediate Termination Upon Litagat~on Notw~thstanchng any other prows~on of this Agreement, to m~t~gate damages and to preserve ewdence and ~ssues for judm~al determination, either party shall have the right to terminate tlus Agreement upon lmmechate notice to the other party ~n the event that any person has ~nstatuted htagat~on concerning the act~wlaes of the non-tenmnatmg party, and the termmat~ng party reasonably beheves that such act~wties are reqmred or prohibited under this Agreement 4.5 In the event that th~s Agreement ~s tenmnated pursuant to ¶¶4 3 or 4 4, FOUNDATION agrees to refund any and all unused funds, or funds determined by the CITY to have been used ~mproperly, wltlun 30 days after termination of tlus Agreement V GENERAL PROVISIONS 5.1 Subcontract for Performance of Serwees. Nothing ~n th~s Agreement shall probablt, nor be construed to protub~t, the agreement by the FOUNDATION w~th another private entity, person, or orgamzat~on for the performance of those services described ~n ¶2 1 above In the event that the FOUNDATION enters into any arrangement, contractual or otherwise, w~th such other entity, person or orgamzatlon, the FOUNDATION shall cause such other entity, person, or organ~zataon to adhere to, conform to, and be subject to all provisions, terms, and conditions of tins Agreement and to Tax TAX CODa ch 351, including reporting requirements, separate funds mmntenance, and hlmtatlon$ and pmbabltlons pertalmng to expenditure of the agreed payments and hotel tax funds 5 2 Independent Contractor. The FOLrNDATION shall operate as an independent contractor as to all servmes to be performed under tins Agreement and not as an officer, agent, servant, or employee of the CITY The FOUNDATION shall have exclusive control of ~ts operations and performance of services hereunder, and such persons, entlt~es, or orgamzat~ons performing the same and the FOUNDATION shall be solely responsible for the acts and omissions of ~ts directors, officers, employees, agents, and subcontractors The FOUNDATION shall not be considered a partner or jomt venturer with the CITY, nor shall the FOUNDATION be considered nor ~n any manner hold ~tself out as an agent or official representative of the CITY 5 3 Indemnifleat~on. The FOUNDATION agrees to ~ndemmfy, hold harmless, and defend the CITY, ~ts officers, agents, and employees from and agmnst any and all clmms or stats for injuries, damage, loss, or habthty of whatever kand or character, arising out of or ~n connection with the performance by the FOUNDATION or those services contemplated by ti'us Agreement, mcludang all such claims or causes of action based upon common, constitutional or statutory law, or based, m whole or m part, upon allegations of negligent or intentional acts of FOUNDATION, its officers, employees, agents, subcontractors, hcensees and mwtees 5 4 Aas~gnment. The FOUNDATION shall not assign tbas Agreement without first obtamang the written consent of the CITY Page 6 5.5 Notice. Any notme reqmred to be g~ven under tins Agreement or any statute, ordinance, or regulation, shall be effective when given m writing and depomted in the Umted States mml, cemfied mall, return receipt requested, or by hand-delivery, addressed to the respective part, es as follows CITY FOUNDATION City Manager Denton Festival Foundation, Inc City of Denton Carol Short 215 E McKmney Festival Coordinator Denton, TX 76201 P O Box 2104 Denton, Texas 76202-2104 5 6 Inurement. Tins Agreement and each prowslon hereof, and each and every right, duty, obhgat~on, and habthty set forth hereto shall be binding upon and inure to the benefit and obhgalaon of the CITY and the FOUNDATION and their respective successors and assigns 5 7 Appheaflon of Laws. All terms, conditions, and prov~sions of ttus Agreement are subject to all applicable federal laws, state laws, the Charter of the City of Denton, all ordinances passed pursuant thereto, and all jurhclal determlnataons relative thereto 5.8 Exclusive Agreement. Tins Agreement contains the entire understanding and constitutes the entire agreement between the part,es hereto concermng the subject matter contained herem There are no representations, agreements, arrangements, or understandings, oral or written, express or lmphed, between or among the parties hereto, relating to the subject matter of this Agreement, which are not fully expressed hereto The terms and conditions of tins Agreement shall prevail notwithstanding any variance m th~s Agreement fi:om the terms and condataons of any other document relating to tins transaction or these transactions 5 9 Dnplleate Originals Ttus Agreement is executed ~n duphcate originals 5 10 Headings. The heachngs and subheadings of the various sections and paragraphs of tins Agreement are inserted merely for the purpose of convenience and do not express or ~mply any hnutat~on, defimt~on, or extension of the spac~fic terms of the section and paragraph so designated 5 11 Severabiilty. If any section, subsection, paragraph, sentence, clause, phrase or word in ttus Agreement, or apphcalaon thereof to any person or circumstance ~s held invalid by any court of competent junschct~on, such holdmg shall not affect the val~chty of the remalmng portions of ttus Agreement, and the parties hereby declare they would have enacted such remalmng portions despite any such lnvalichty 5.12 Insurance. The FOUNDATION shall prowde insurance as follows 1 $500,000 Commercial General Llabthty, or $1,000,000 Event Insurance, covering all events taking place on City-owned property 2 Statutory Workers' Compensation and Employers' Llainhty ($100,000/$500,000/$100,000) Page 7 The CITY must be named as an adrhtlonal insured on all pohmes (except Workers' Compensation) and proof of coverage shall be submitted prior to any payment by the CITY EXECUTED ttus _~-- day of k~2'7~-~27~//~ , 1999 THE CITY OF DENTON, TEXAS By JAC~ ATTEST APPROVED AS TO LEGAL FORM , E rWALTERS, raP*ERTL P OUTY, / ~ITY SECRETARY CITY ATTORNEY / / DENTON FESTIVAL FOJZlNDATION, INC / By Chalrman/D~rector ATTEST APPROVED AS TO LEGAL FORM BYs ec~r t~~al/~_~ By Page 8 Exh~bff A Denton Festival Foundation Budget Proposal Program Year 2000 Requested Program I ACtlv,ty Amount Advertising Arts & Jazz Feshval Newspapers, TV, Magazines $ 15,000 Brochures 4,000 Pnntlng 2,000 Postage 2,000 Telephone 500 Salanes- D~rector 9,438 Art Arts & Jazz Feshval Musicians 25,000 Equipment 5,000 Supplies 1,500 Salaries - D~rector 5,562 $ 70,000 EXAMPLE Exhibit B FINANCIAL REPORT Program Year 2000 1BT 2ND 3RD 4TH BUDGET QUARTER QUARTER QUARTER QUARTER YEAR VS (Jan-Mar) (Apr-Jun) (JuI-Sep) (Oct-Dec) TO DATE ACTUAL $o $o $o $o $o $o $0 $0 $0 $0 $0 $10,000 r~ 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 1,000 1,000 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Date Submitted Program D,rector