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1999-303AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE TEJAS STORYTELLING ASSOCIATION, 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 C~ty of Denton and the Tejas Storytelhng Assocmt~on, Inc for the payment and use of hotel tax revenue, under the terms and conditions contmned m the agreement, a copy of which is attached hereto and made a part hereof ~ That th~s ordinance shall become effective ~mmed~ately upon ~ts passage and approval PASSED AND APPROVED tins the ~ day of (~~ , 1999 JAC~IId~LER, MAYOR ATTEST, JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY AGREEMENT BETWEEN THE CITY OF DENTON AND TEJAS STORYTELLING ASSOCIATION, INC (CY2000) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEMENT made between the C~ty of Denton, Texas, a mumc~pal corporation (the "CITY"), and the Tejas Storytelling Assocmtlon, Inc, a legal entity incorporated under the laws of the State of Texas (the "ASSOCIATION") WHEREAS, Tex Tax Code §351 002 authonzes the CITY to levy by ordinance a munac~pal,hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the cons~deraUon paid by a hotel occupant, and WHEREAS, by ordinance, the CITY has prowded for the assessment and collection of a mun~capal hotel occupancy tax m the City of Denton of seven percent (7%), and WHEREAS, Tex Tax Code §351 101(a) authonzes the CITY to use revenue from its mumc~pal hotel occupancy tax to promote tourism and the convenUon and hotel industry by advertising and conducting sohcltat~ons and promoUonal programs to attract tounsts and convention delegates or registrants to the mumc~pahty or ~ts wc~mty, and WHEREAS, the ASSOCIATION ~s well eqmpped to perform those aet~vmes, and WHEREAS, Tex Tax Code §351 101(c) authorizes the CITY to delegate by contract w~th the ASSOCIATION, as an ~ndependant entity, the management and superws~on of programs and act~wt~es of the type described heremabove funded w~th revenue from the mumc~pal hotel occupancy tax, NOW, THEREFORE, ~n cons~deratton of the performance of the mutual covenants and promises contained here~n, the CITY and the ASSOCIATION agree and contract as follows L HOTEL TAX REVENUE PAYMENT 1.1 Consideration For and m cons~deral~on of the actavltues to be performed by the ASSOCIATION under flus Agreement, the CITY agrees to pay to the ASSOCIATION a port~on of the hotel tax revenue collected by the CITY at the rates and ~n the manner specified here~n (such payments by the CITY to the ASSOCIATION sometimes hereto referred to as the "agreed payments" or "hotel tax funds") 1 2 Amount of Payments (a) As used m tins Agreement, the following terms shall have the following specific meanings 0) The term "hotel tax revenue" shall mean the gross momes collected and received by the City as municipal hotel occupancy tax at the rate of seven percent (7%) of the puce paid for a room m a hotel, pursuant to Texas Tax Code 351 002 and C~ty Ordanance Hotel tax revenue will xnchide penalty and interest related to the late payments of the tax revenue by the taxpayer 0~) The term "Colleetton penod" wall mean the eollectxon period for the CITY's fiscal year It wall include hotel tax revenue due to the Cxty for the relevant fiscal year and collected through the 22nd day of the month followang the close of the relevant fiscal year 0n) The term "base payment mount" shall mean a net amount of money equal to the total hotel tax revenue collected by the CITY during any relevant period of ttme (z e, fiscal year or fiscal quarter), less (1) attorney and aurhtxng costs incurred during such relevant period of t~me for costs of collection or audxtmg of hotel taxpayers Attorney and anditmg costs include fees paid to attorneys or agents not m the regular employ of the CITY for wbach attorneys or agents effect comphance or collection of the hotel tax fi.om taxpayers, and (2) court costs and other expenses recurred an htlgataon against or audating of such taxpayers 0v) The term "contract quarter" shall refer to any quarter of the calendar year m wi'ach flus Agreement as m force Contract quarters will end on March 31st, June 30th, September 30th, and December 31st of each contract year (b) In return for satxsfactory performance of the actlvxtles set forth ~n this Agreement and all attachments hereto, the CITY shall pay to ASSOCIATION an amount of money in each contract year equal to the lesser amount of Four and Fifty-Six One Hundredths percent (4 56%) of the annual base payment amount or the fixed contract amount of Fxfiy Thousand F~ve hundred Twenty Dollars ($50,000) This amount will be dlvxded ~nto 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 wall be less than originally estamated for the fiscal year The fourth quarterly payment will represent 25% of the fixed contract amount or the unpaid remainder of 4 56% of the base payment amount, whichever ~s less Each quarterly payment is subject to receipt of unused funds from the prior contract period and the receipt of the reqmred quarterly reports 1 3 Dates of Payments to ASSOCIATION. (a) The term "quarterly payments" shall mean payments by the CITY to the ASSOCIATION of those amounts specified m ¶l 2, above, as determaned by the hotel tax revenue collected (b) Each quarterly payment shall be pa~d upon receapt 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 waflun thirty (30) days of the end of the apphcable contract quarter, the recipient may be held m breach of flus Agreement The CITY may wathhold the quarterly payment(s) until the appropriate reports are reeeaved and approved, which approval shall not unreasonably be wathheld p~e2 1 4 Other limitations regardmg consideration. (a) The funding of flus project ~n no way commats the CITY to future funding of flus program beyond the current contract period Any future funding is solely the responslblhty of the ASSOCIATION (b) It ~s expressly understood that flus contract m no way obligates the General Fund or any other monies or credits of the CITY (e) CITY may withhold further allocations if CITY determines that ASSOCIATION's expendatures 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 ASSOCIATION of the agreed payments of hotel tax funds specified above, the ASSOCIATION agrees to use such hotel tax funds only for advertising and conducting sohcltataons and promotional programs to attract tourists and convention delegates or registrants to the mumclpahty or ~ts VlCunty as authorized by TEx TAX Coog § 351 101 (a) Funds for any calendar year wluch are unused by rmdmght December 31st of that year shall be refunded to CITY w~flun flurry (30) days 2.2 Administrative Costs The hotel tax funds received from the CITY by the ASSOCIATION may be spent for day-to-day operations, supphes, salaries, office rental, travel expenses, and other admunstrat~ve costs that are ~ncurred dxrectly m the performance by the ASSOCIATION of those activities specified in ¶2 1 above and are allowed by TEX TAX COVE §3~51 101(0 2 3 Specific Restrictions on Use of Funds. (a) That port,on of total adrmms~rat~ve costs of the ASSOCIATION for which hotel tax funds may be used shall not exceed that port~on of the ASSOCIATION's adnumstrat~ve costs actually recurred m conducting the actavit~es 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 actlwty the primary purpose of wbach is not directly related to the promotion of local tourism and the conventaon and hotel mdust~ or the performance of the person's job m an efficient and professional manner HI. RECORDKEEPING AND REPORTING REQUIREMENTS 3 1 Budget (a) The ASSOCIATION shall prepare and submit to the City Manager of the CITY an annual budget (see Extub~t "A") as approved by the C~ty Council for each calendar year, for such operations of the ASSOCIATION m wbach the hotel tax funds shall be used by the ASSOCIATION Tlus budget shall specifically ~dentlfy proposed expenditures of hotel tax funds by the ASSOCIATION In other words, the CITY should be able to audtt specifically where the funds m the separate account relating to hotel tax funds will be expended The CITY shall not pay to the ASSOCIATION any hotel tax revenues as set forth m Section I of flus contract dunng any Page 3 fiscal year of flus Agreement unless a budget for such respective fiscal year has been approved in writing by the Denton City Council anthonmng the expemhture of funds Fatlure to subrmt an annual budget may be considered a breach of contract, and if not remedxed is considered grounds for termmatlon of flus Agreement as stated m paragraph 4 2 (b) The ASSOCIATION acknowledges that the approval of such budget by the Denton City Council creates a fiduciary duty m the ASSOCIATION with respect to the hotel tax funds pard by the CITY to the ASSOCIATION under thxs Agreement The ASSOCIATION shall expend hotel tax funds only in the manner and for the purposes specified ~n th~s Agreement, TEx Tax CODE §351 101(a) and m the budget as approved by the CITY 3.2 Separate Aeeounts. The ASSOCIATION shall mmntmn any hotel tax funds prod to the ASSOCIATION 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 reconmhatxon report (see Exhibit "B") xs reqmred with each quarterly report 3.3 Financial Records. The ASSOCIATION shall mmntaln complete and accurate flnancxal records of each expandtture of the hotel tax funds made by the ASSOCIATION These funds are reqmred tO be classified as restricted funds for andated f'manmal purposes, and may not be used for supportmg services, including, but not lamted to, auditing fees and attorney's fees Upon reasonably advance written request of the Denton City Council, the C~ty Manager or designate, or any other person, shall make such financial records avmlable for inspection and rewew by the party makung the request ASSOCIATION understands and accepts that all such financial records, and any other records relating to this Agreement shall be subject to the Pubhc Informatmn Act, TEx Gov'T CoD~, ch 552, as hereafter amended 3 4 QUarterly Reports. Wxthln flurty days after the end of every contract quarter, ASSOCIATION shall furmsh to CITY (1) a performance report of the work performed under flus Agreement describing the actlmt~es performed pursuant to th~s Agreement dunng that contract quarter, and (2) a hst of the expenditures made with regard to hotel tax funds pursuant to TEx T^x COD~ §351 101(c) Both the performance and expenditure reports will be m a form either determined or approved by the City Manager or designate (see Extublt "B") The ASSOCIATION shall respond promptly to any request from the City Manager of the CITY, or designate, for additional mformatton relating to the act~mt~es performed under flus Agreement 3 5 Notice of Meetings The ASSOCIATION shall g~ve the City Manager of the CITY reasonable advance written notme of the txme and place of all meetings of ASSOCIATION's Board of Directors, as well as any other meeting of any constituency of the ASSOCIATION at wl~ch flus Agreement or any matter the subject of flus Agreement shall be consxdered Tlus provision shall not be deemed to reqmre the ASSOCIATION to g~ve nottce of any executive session of the Executive Committee of the ASSOCIATION IV. TERM AND TERMINATION 4.1 Term. The term of this Agreement shall commence on January 1, 2000 and terminate at mxdmght on December 31, 2000 Thts term shall be a period of one year Page 4 4 2 Termination Without Cause. (a) This Agreement may be terminated by either party, w~th or without cause, by g~ving 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 ASSOCIATION for any contractual obligations of the ASSOCIATION undertaken by the ASSOCIATION 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 I This reimbursement ~s condlttoned upon such contractual obhgataons 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 ASSOCIATION or to assume the performance of any contractual obligations of the ASSOCIATION for or under any contract entered into by the ASSOCIATION as contemplated herein shall not exceed 66 2/3% of the current quarterly payment (e) Further, upon termination pursuant to ¶4 2(a), the ASSOCIATION will prowde the CITY 1) Within 10 bus~ness days from the termination notification, a short-term budget of probable expenditures for the rema~mng 60 day period between termination notfficataon and contract termination Th~s budget will be presented to Council for approval within 10 business days after receipt by CITY If formal approval ~s not g~ven w~thin 10 business days and the budget does not contain any expenchtures 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 prewously audited by the City, 3) Within 5 business days of a request from the CITY, a listing of expenditures that have occurred smee the last required reporting period, 4) a final accounting of all expenditures and tax funds on the day of termination The ASSOCIATION will be obligated to return any unused funds or funds determined to be used improperly Any use of remaining funds by the ASSOCIATION after notification of termination IS conditioned upon such contractual obligations having been incurred and entered into in the good froth performance of those servmes contemplated in 2 1 and 2 2 above, and further conditioned upon such contractual obligations having a term not exceeding the full term ofth~s Agreement 4 3 Automatic Termination Tlus Agreement shall automatically terminate upon the occurrence of any of the following events (a) The tenmnataon of the legal existence of the ASSOCIATION, (b) The insolvency of the ASSOCIATION, the filing of a petition in bankruptcy, either voluntarily or involuntarily, or an assignment by the ASSOCIATION for the benefit of creditors, (c) The continuation of a breach of any of the terms or contht~ons of tlus Agreement by either the CITY or the ASSOCIATION for more than tturty (30) days after written notme of such broach is given to the broaching party by the other party, or Page 5 (d) The fmlure of the ASSOCIATION to submit a financial quarterly report winch comphes with the reportmg procedures reqtured hereto and generally accepted accounting pnnc~ples pnor to the beg~nmng of the next contract term, or quarterly as reqmred by Sectaon 1 3 hereof 4 4 Right to Immediate Termination Upon Lltigaaon Notw~thstanthng any other prows~on of tins Agreement, to rmtlgate damages and to preserve evidence and ~ssues for jud~cml determination, e~ther party shall have the nght to terrmnate t!us Agreement upon ~mmethate not, ce to the other party ~n the event that any person has ~nst~tuted ht~gat~on concemmg the act~wtles of the non-terrmnatmg party, and the terminating party reasonably beheves that such ect~vlt~es are reqmred or prolublted under tlus Agreement 4.5 In the event that fl'ns Agreement ~s tenmnated pursuant to ¶¶4 3 or 4 4, ASSOCIATION agrees to refund any and all unused funds, or funds determmed by the CITY to have been used ~mproperly, w~th~n 30 days after termmat~on of th~s Agreement V. GENERAL PROVISIONS 5 1 Subcontract for Performance of Services. Nothing m tlus Agreement shall prolublt, nor be construed to proinblt, the agreement by the ASSOCIATION with another pnvate entity, person, or orgamzat~on for the performance of those services descnbed in ¶2 1 above In the event that the ASSOCIATION enters ~nto any arrangement, contractual or othenv~se, w~th such other entity, person or orgamzat~on, the ASSOCIATION shall cause such other entity, person, or orgamzat~on to adhere to, conform to, and be subJeCt to all prowslons, terms, and conditions of ttus Agreement and to Tax T^x CePh ch 351, including reporting reqmrements, separate funds mmntenance, and hmltatlons and prolublt~ons pertaunng to expenditure of the agreed payments and hotel tax funds 5 2 Independent Contractor The ASSOCIATION shall operate as an ~ndependent contractor as to all services to be performed under tlus Agreement and not as an officer, agent, servant, or employee of the CITY The ASSOCIATION shall have exclusive control of Its operations and performance of services hereunder, and such persons, ent~tles, or orgamzataons performing the same and the ASSOCIATION shall be solely responsible for the acts and omissions of its dtrectors, officers, employees, agents, and subcontractors The ASSOCIATION shall not be considered a partner or Joint venturer w~th the CITY, nor shall the ASSOCIATION be considered nor m any manner hold Itself out as an agent or official representative of the CITY 5 3 Indenmtfleatiun. The ASSOCIATION agrees to mdemmfy, hold harmless, and defend the CITY, its officers, agents, and employees from and agmnst any and all clmms or stats for lnjunes, damage, loss, or hab~hty of whatever land or character, arising out of or ~n connection with the performance by the ASSOCIATION or those services contemplated by tlus Agreement, ~ncludlng all such clmms or causes of action based upon common, constitutional or statutory law, or based, ~n whole or m part, upon allegations of neghgent or ~ntent~onal acts of ASSOCIATION, ~ts officers, employees, agents, subcontractors, heensees and ~nwtees 5 4 Assignment. The ASSOCIATION shall not assign tlus Agreement w~thout first obtmmng the written consent of the CITY Page 6 5 5 Not~ee. Any notice reqmred to be given under ttus Agreement or any statute, ordinance, or regnlatlon, shall be effectave when g~ven m writing and deposited m the Umted States mml, cemfied mml, return receipt requested, or by hand-dehvery, addressed to the respective pames as follows CITY ASSOCIATION City Manager Tejas Storytelling Association, Inc City of Denton Karen Morgan 215 E MoKmney P O Box 2806 Denton, TX 76201 Denton, Texas 76202-2806 5 6 Inurement. Tbas Agreement and each provision hereof, and each and every right, duty, obligation, and liability set forth hereto shall be binding upon and inure to the benefit and obllgalaon of the CITY and the ASSOCIATION and their respective successors and assigns 5.7 Applieataon 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 or&nantes passed pursuant thereto, and all judaclal determinations relative thereto 5 8 Exclusive Agreement. Tbas Agreement contmns the entire understanding and constttutes the entire agreement between the part, es hereto concermng the subJeCt matter contained hereto There are no representations, agreements, arrangements, or understanchngs, oral or written, express or lmphed, between or among the pames hereto, mlatang 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 tlus Agreement from the terms and conditions of any other document relating to this transaction or these transacUons 5.9 Duplicate Originals. Tlus Agreement is executed in duplicate originals 5 10 Iteadlngs. 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 hnutatlon, defaut~on, or extension of the specific terms of the section and paragraph so designated 5 11 Severabihty. If any section, subsection, paragraph, sentence, clause, phrase or word m ttus Agreement, or apphcat~on thereof to any person or clmumstance is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remmmng portions of this Agreement, and the partaes hereby declare they would have enacted such remmmng portions despite any such xnvalldlty $12 Insurance. The ASSOCIATION shall provide insurance as follows 1 $500,000 Commemlal General Llablhty, or $1,000,000 Event Insurance, covenng all events taking place on City-owned property 2 Statutory Workers' Compensation and Employers' Llablhty ($100,000/$500,000/$100,000) 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 THE CITY OF DENTON, TEXAS By ~ JACKyLER, MAYOR ATTEST APPROV ED~A_~S_ ~T_Q L~F ORM ~v,ITY SECRETARY CITY ATTORNEY ~ TEJAS STORYTELLING JASSOCIATION, INc Cl~mrn~an/D~rector ATTEST APPROVED AS TO LEGAL FORM By By Secretary Page 8 Exhibit A TEJAS STORYTELLING ASSOCIATION for the TEXAS STORYTELLING FESTIVAL The Texas Storytelling Festival consists of four days of concerts, coaching sessions, and how-to workshops all directly related to the various aspects of the art of storytall~ng Denton's Texas Storytelhng Festival fits many categones as defined by the HOT Recipient Program Storytelhn exists as a performing art and a folk art with firm and distinct connections to Amencan history, world h~story, and family h~stones Storytelhng serves as a hteracy tool for chddren and young adults, connecting them to written literature, history, and the sciences The audiences at the annual Texas Storytelling Association (TSA), which produces the festival, works year round to ensure that the entertainment and educational values are of the highest quahty with multicultural diversity that reflects Amencan Socmty today Budget Propoaal for Program Year 2000 Requested Pro~lram/Actlvlt~ Amount Advertising Texas Storytelling Festival Newspapers, tv, and magazines $ 8,000 Flyers, posters, and brochures 7,000 Other printed communication newsletters 2,000 Printing 1,500 Mailing list purchases 1,000 Mailing costs 3,000 Video and still photography 2,000 Staff travel to promote festival 500 00 $ 25,000 ITexas Storytelhng Festival - Art [Performanca Fees Salanes -Office Staff $ 2,000 Office Supphes and Phone 1,200 Office Rental 320 S~te Operations Expenses -Tent, chair, and stage rentals 4,000 -Sound Equipment 400 Food and Lodging 1,000 Honorla 440 $ 9,360 HIstorical Texas Storytelling Festival Concerts $ 800 Workshops 800 Salanes -Office Staff 3,000 Office Supplies and Phone 1,800 Office Rental 480 Site Operations Expenses ff-xl~lDit A -Ten[, chair, and stage rentals 6,000 -Sound Equipment 600 Food and Lodging 1,500 Honoria 660 $ 15,640 Total' $ 50,000 Exhibit B EXAMPLE FINANCIAL REPORT Program Year 2000 15T 2ND 3RD 4TH BUDGET QUARTER QUARTER QUARTER QUARTER YEAR TO VS (Apr-Jun) (Jul-~ep) (Ocr. Dec) DATE ACTUAL $o $o $o $o $o $o $o $o $o $o $o $1o,ooo 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 1,000 0 0 0 0 0 1,000 0 0 0 0 0 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Date Submitted Program Director