1999-304AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON BLACK CHAMBER OF
COMMERCE 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 anthonzed to execute an agreement between the
City of Denton and the Denton Black Chamber of Commerce for the payment and use of hotel
tax revenue, under the terms and conditions contained ~n the agreement, a copy of which ~s
attached hereto and made a part hereof
~ That this orthnance shall become effective immediately upon its passage
and approval
PASSED AND APPROVED thls the ~----~ dayof ~ZT'-~~ ,
1999
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBE~RNEY
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON BLACK CHAMBER OF COMMERCE (CY2000)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the C~ty of Denton, Texas, a mummpal corporation
(the "CITY"), and the Denton Black Chamber of Commerce, a legal entity ex~mng under the laws
of the State of Texas (the "CHAMBER")
WHEREAS, Tex Tax Code §351 002 authorizes the CITY to levy by ordinance a
mumclpal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the cons~deration
prod by a hotel occupant, and
WHEREAS, by ordinance, the CITY has provided for the assessment and collection of a
mun~mpal hotel occupancy tax ~n the Cxty of Denton of seven percent (7%), and
WHEREAS, Tex Tax Code §351 101(a) authorizes the CITY to use revenue from ~ts
municipal hotel occupancy tax to promote tourism and the convention and hotel industry by
advertising and conducting sohc~tat~ons and promotional programs to attract tourists and convention
delegates or registrants to the mummpal~ty or ~ts wc~mty, and
WHEREAS, the CHAMBER ~s well eqmpped to perform those acttwtles, and
WHEREAS, Tex Tax Code §351 101(c) anthonzes the CITY to delegate by contract w~th
the CHAMBER, as an ~ndependent entity, the management and supervision of programs and
act~vmes of the type described heremabove funded w~th revenue from the mumc~pal hotel
occupancy tax,
NOW, THEREFORE, m consideration of the performance of the mutual covenants and
promises contained here~n, the CITY and the CHAMBER 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
CHAMBER under flus Agreement, the CITY agrees to pay to the CHAMBER a portion of the hotel
tax revenue collected by the CITY at the rates and m the manner spemfied hereto (such payments by
the CITY to the CHAMBER sometunes hereto referred to as the "agreed payments" or "hotel tax
funds")
1 2 Amount of Payments.
(a) As used m flus Agreement, the following terms shall have the following specific
meanmgs
0) The term "hotel tax revenue" shall mean the gross momes collected and
received by the C~ty as mumc~pal hotel occupancy tax at the rate of seven percent (7%) of
the price p~ud for a room ~n a hotel, pursuant to Texas Tax Code 351 002 and C~ty
Ordinance Hotel tax revenue will include penalty and interest related to the late
payments of the tax revenue by the taxpayer
00 The term "Collectaon 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
(nO The term "base payment amount" shall mean a net amount of money equal
to the total hotel tax revenue collected by the CITY dunng any relevant period of tune (t e,
fiscal year or fiscal quarter), less (1) attorney and authtmg costs ~ncurred dunng such
relevant period of tune for costs of collection or auditing of hotel taxpayers Attorney and
auchlang costs include fees prod to attorneys or agents not in the regular employ of the CITY
for wbach attorneys or agents effect comphance or collectaon of the hotel tax from taxpayers,
and (2) court costs and other expenses incurred ~n ht~gatlon against or auchtlng of such
taxpayers
Ov) The term "contract quarter" shall refer to any quarter &the calendar year m
wluch this Agreement ~s ~n force Contract quarters will end on March 31st, June 30th,
September 30~, and December 31 st of each contract year
(b) In return for satisfactory performance of the activities set forth in th~s Agreement
and all attachments hereto, the CITY shall pay to CHAMBER an amount of money ~n each
contract year equal to the fixed contract amount of Ten Thousand Dollars ($10,000) Th~s
amount will be dlwded into no more than two payments Each 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.
(a) The term "payments" shall mean payments by the CITY to the CHAMBER of those
amounts spemfied m ¶1 2, above, as determmed by the hotel tax revenue collected
(b) In return for the satisfactory performance of the activities set forth m flus contract and
all attachments thereto, CITY shall pay the CHAMBER the agreed payments specffied m ¶1 2
above by no more than two payments, paying the fixed contract amount dtmng the 1st and 2nd
quarter of the calendar year If a second payment ~s due, that payment shall be prod upon receipt
of the required reports end after the 25th day following the last day of the contract quarter If
quarterly financial and performance reports are not received w~thtn tlurty (30) days of the end of the
apphcable quarter, the recipient may be held m breach of ttus Agreement The CITY may w~thhold
the quarterly payment(s) untal the appropriate reports are received and approved, wbach approval
shall not mrtreasonably be w~thheld
1 4 Other limitations regarding consideration
(a) The funding of th~s project m no way commits the CITY to future funrhng of flus
program beyond the current contract penod Any future funding ~s solely the respons~b~hty of the
CHAMBER
Page 2
(b) It lS expressly understood that flus contract in no way obligates the General Fund or any
other monies or credits of the CITY
(c) CITY may w~thhold further allocataons if CITY determanes that CHAIVIBER's
expenchtures dewate materially from their approved budget
II USE OF HOTEL TAX REVENUE
2 1 Use of Funds. For and m conslderalaon of the payment by the CITY to the CHAMBER of the
agreed payments of hotel tax funds specified above, the CHAMBER agrees to use such hotel tax
funds only for advertising and conducting sohcltat~ons and promotional programs to attract tourists
and convention delegates or registrants to the munlcipahty or ~ts wmmty as authorized by TEx T^x
CODE §351 101(a) Funds for any calendar year wluch are unused by m~dmght December 31st of
that year shall be refunded to CITY wattun tlurty (30) days
2.2 Administrative Costs. The hotel tax funds received from the CITY by the CHAMBER may
be spent for day-to-day operations, supphes, salunes, office rental, travel expenses, and other
admunstrat~ve costs that are incurred directly in the performance by the CHAMBER of those
actlwt~es spemfled m ¶2 1 above and are allowed by TEX T^x CODE §351 101(f)
2 3 Specific Restrletlons on Use of Funds
(a) That portion of total admlmstrat~ve costs of the CHAMBER for wtuch hotel tax
funds may be used shall not exceed that pomon of the CHAMBER's admunstratlve costs actually
incurred in conductmg the act~mtles specified ~n ¶2 1 above
(b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct
an act~mty the primary purpose of wluch ~s not d~rectly related to the promotton of local tourism and
the conventaon and hotel ~ndustry or the performance of the person's job ~n an efficient and
professional manner
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
(a) The CHAMBER shall prepare and submit to the C~ty Manager of the CITY an annual
budget (see Exbab~t "A") as approved by the C~ty Council for each calendar year, for such
operations of the CHAMBER m wtueh the hotel tax funds shall be used by the CHAMBER This
budget shall specffically ~dentffy proposed expenchtures of hotel tax funds by the CHAMBER In
other words, the CITY should be able to audit specffically where the funds ~n the separate account
relating to hotel tax funds will be expended The CITY shall not pay to the CHAMBER any hotel
tax revenues as set forth m Section I of this contract during any fiscal year oftlus Agreement unless
a budget for such respective fiscal year has been approved ~n writing by the Denton C~ty Council
authorizing the expenchture of funds Fmlure to subnmt an annual budget may be conmdered a
breach of contract, and ~f not remedied ~s considered grounds for termination of tins Agreement as
stated ~n paragraph 4 2
Page 3
(b) The CHAMBER acknowledges that the approval of such budget by the Denton C~ty
Council creates a fiducmry duty m the CHAMBER with respect to the hotel tax funds paid by the
CITY to the CHAMBER under th~s Agreement The CHAMBER shall expend hotel tax funds only
m the manner and for the purposes specified in ttna Agreement, Tex T^x Co~)g §351 101(a) and m
the budget as approved by the CITY
3 2 Separate Accounts. The CHAMBER shall mmntam any hotel tax funds prod to the
CHAMBER by the CITY m a separate bank account with segregated accounting, such that any
reasonable person can rewew the source of expenchtures of tax funds A bank reconcfllataon report
(see Exhthlt "B") is required w~th each quarterly report
3 3 FmanelalRecords. The CHAMBER shall mamtmn complete and accurate financial
records of each expendtture of the hotel tax funds made by the CHAMBER These funds are
required to be classified as restricted funds for auchted fmanmal proposes, and may not be used for
supporting services, including, but not hmlted 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 available for lnspectaon and rewew by the party
makdng the request CHAMBER understands and accepts that all such financml records, and any
other records relating to this Agreement shall be subject to the Public Information Act, T~x Gov'T
COD~, ch 552, as hereafter amended
3 4 Qiaarterly Reports. After matml receipt of hotel tax funds, and w~th~n thtrty days after the
end of every quarter thereafter, untal all funds have been expended and reported to the CITY,
CHAMBER shall furmsh to CITY (1) a performance report of the work performed under th~s
Agreement describing the aetavltaes performed pursuant to tbas Agreement during that contract
quarter, aod (2) a list of the expenditures made with regard to hotel tax funds pursuant to T~x 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 Exhibit "B") The CHAMBER shall
respond promptly to any request from the City Manager of the CITY, or designate, for additional
mformataon relating to the actawtles performed under tlna Agreement
3 5 Not~ee of Mectmgs. The CHAMBER shall give the C~ty Manager of the CITY reasonable
advance written notace of the tame and place of all meetings of CHAMBER's Board of Directors, as
well as aay other meetang of any constatuency of the CHAMBER at wbach this Agreement or any
matter the subject of flus Agreement shall be considered Th~s prowslon shall not be deemed to
reqmre the CHAMBER to give notme of any executave session of the Executave Committee of the
CHAMBER
IV. TERM AND TERMINATION
4 1 Term. The term of fins Agreement shall commence on January 1, 2000 and tenmnate at
mldmght on December 31, 2000 Tins term shall be a period of one year
4.2 Termination Without Cause.
(a) Ttna Agreement may be terminated by either party, with or without cause, by glmng
the other party sixty (60) days advance written noUce
Page 4
(b) In the event thas contract is terminated by eather party pursuant to Sectaon 4 2(a),
the CITY agrees to reimburse the CHAMBER for any contractual obhgataons of the CHAMBER
undertaken by the CHAMBER m satmfactory performance of those act~wtles spemfied m ¶¶2 1
and 2 2 above and that were approved by the Council through the budget, as noted ~n ¶3 1 This
reimbursement m conditioned upon such contractual obligations hawng been incurred and
entered into ~n the good froth performance of those services contemplated in ¶¶2 1 and 2 2 above,
and further condltaoned upon such contractual obhgatlons having a term not exceeding the full
term of th~s Agreement Notw~thstandang any provision hereof to the contrary, the obhgataon of
the CITY to reimburse the CHAMBER or to assume the performance of any contractual
obhgat~ons of the CHAMBER for or under any contract entered anto by the CHAMBER as
contemplated here~n shall not exceed 66 2/3% of the current quarterly payment
(c) Further, upon termination pursuant to ¶4 2(a), the CHAMBER will provide the
CITY 1) W~thln 10 business days from the termanataon notfficatlon, a short-term budget of
probable expenditures for the remammg 60 day period between termmataon notification and
contract termination Tlus budget will be presented to Cotmcd for approval within 10 business
days after receapt by CITY If formal approval is not given wlthan 10 business days and the
budget does not contmn any expenditures that would be prohibited by the Texas Tax Code, and
is w~th~n the current contractual period approved budget, the budget will be considered
approved, 2) W~thm 30 days, a full accounting of all expendatures not previously audated by the
C~ty, 3) Within 5 busmess days of a request from the CITY, a hst~ng of expenditures that have
occurred s~nce the last reqmred reportmg period, 4) a final accounting of all expenditures and tax
funds on the day of term~natlon The CHAMBER w~ll be obligated to return any unused funds or
funds detenmned to be used ~mproperly Any use of remmmng funds by the CHAMBER after
notfficataon of termination ~s condat~oned upon such contractual obhgat~ons having been recurred
and entered into ~n the good faith performance of those services contemplated ~n 2 1 and 2 2
above, and further conditioned upon such contractual obhgat~ons having a term not exceeding
the full term of thru Agreement
4 3 Antomafle Terminataon. Ttus Agreement shall automatically terrmnate upon the
occurrence of any of the following events
(a) The temunatlon of the legal exmtence of the CHAMBER,
(b) The ~nsolvency of the CHAMBER, the fihng of a petltton an bankruptcy, eather
voluntarily or anvoluntanly, or an ass~glrment by the CHAMBER for the benefit of crerhtors,
(c) The continuation of a breach of any of the terms or conditions of ttus Agreement by
etther the CITY or the CHAMBER for more than tharty (30) days at~er written notme of
such breach ~s gtven to the breaching party by the other party, or
(d) The fmlure of the CHAMBER to submit a financial quarterly report wtuch complies
w~th the reporting procedures reqmred herein and generally accepted accounting pnnc~ples
prior to the begmmng of the next contract term, or quarterly as reqmred by Section 1 3
hereof
Page 5
4 4 Right to Immediate Termmation Upon L~agaaon Notw~thstanthng any other prows~on
of this Agreement, to mitigate damages and to preserve ewdence and issues for juthclal
determination, e~ther party shall have the right to terminate tins Agreement upon munethate
notme to the other party m the event that any person has mstttuted lmgatmn eoncermng the
activities of the non-terminating party, and the termlnaUng party reasonably beheves that
such activities are reqmred or pmlub~ted under ttus Agreement
4.5 In the event that tlus Agreement ~s tenmnated pursuant to ¶¶4 3 or 4 4, CHAMBER agrees
to refund any and all unused funds, or funds determined by the CITY to have been used
~mproperly, within 30 days after termination of th~s Agreement
V GENERAL PROVISIONS
5 1 Subcontract for Performance of Services. Nothing ~n tins Agreement shall prolub~t, nor
be construed to pmbab~t, the agreement by the CHAMBER w~th another private enttty, person, or
orgamzat~on for the performance of those services described ~n ¶2 1 above In the event that the
CHAMBER enters into any arrangement, contractual or otherwise, w~th such other entity, person or
organ~zataon, the CHAMBER shall cause such other entaty, person, or orgamzatlon to adhere to,
conform to, and be subject to all provisions, terms, and conrht~ons of th~s Agreement and to T~x
TAx COD~ ch 351, including reportmg reqmrements, separate funds mmntenance, and lmutat~ons
and prolub~t~ons pertaining to expenchture of the agreed payments and hotel tax funds
5 2 Independent Contractor. The CHAMBER shall operate as an ~ndependent contractor as
to all serwces to be performed under tlus Agreement and not as an officer, agent, servant, or
employee of the CITY The CHAMBER shall have exclusive control of ~ts operations and
performance of services hereunder, and such persons, ent~tles, or orgamzat~ons performing the same
and the CHAMBER shall be solely responsible for the acts and omissions of ~ts d~rectors, officers,
employees, agents, and subcontractors The CHAMBER shall not be considered a partner or Joint
venturer w~th the CITY, nor shall the CHAMBER be considered nor in any manner hold ~tself out
as an agent or offimal representative of the CITY
5.3 Indemnfficat~on. The CHAMBER 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 hab~hty of whatever land or character, arising out of or ~n connection w~th the
performance by the CHAMBER or those services contemplated by tlus Agreement, ~nclud~ng all
such clmms or causes of actton based upon common, constitutional or statutory law, or based, ~n
whole or m part, upon allegations of neghgent or intentional acts of CHAMBER, ~ts officers,
employees, agents, subcontractors, hcensees and ~nwtees
5 4 Assignment. The CHAMBER shall not assign ttus Agreement w~thout first obtmnmg the
written consent of the CITY
5 5 Notice. Any not,ce reqmred to be g~ven under tins Agreement or any statute, ordinance, or
regulatqon, shall be effective when g~ven m writing and deposited in the Umted States mml, certafied
mml, return receipt requested, or by hand-dehvery, addressed to the respective pmt~es as follows
Page 6
CITY CHAMBER
City Manager Denton Black Chamber of Commerce
C~ty of Denton Jolm Bmnes
215 E McKlrmey 625 Dallas Drive
Denton, TX 76201 State 200
Denton, Texas 76205
5.6 Inurement. Tbas Agreement and each pmwslon hereof, and each and every right, duty,
obhgation, and habthty set forth hereto shall be binding upon and inure to the benefit and obhgation
of the CITY and the CHAMBER 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 C~ty of Denton, all orthnances passed
pursuant thereto, and alljudlclal determinations relative thereto
5.8 Exclusive Agreement. Tbas Agreement contiuns the entire understanchng and constitutes
the entire agreement between the parttes hereto concermng the subject matter contmned hereto
There are no representations, agreements, arrangements, or understandings, oral or written, express
or ~mphed, between or among the parties hereto, relating to the subject matter of flus Agreement,
which are not fully expressed hereto The terms and cond~tmns of flus Agreement shall prevail
notwlthstanchng any variance m flus Agreement from the terms and conditions of any other
document relating to flus transaction or these transactions
5 9 Duplicate Originals This Agreement is executed in duphcate originals
5 10 Headings. The heachngs and subheadangs of the various sections and paragraphs of th~s
Agreement are inserted merely for the purpose of convemence and do not express or imply any
hrmtatlon, defimtlon, or extension of the specffic terms of the section and paragraph so designated
5.11 Severabthty. If any section, subsection, paragraph, sentence, clause, phrase or word ~n flus
Agreement, or epphcat~on thereof to any person or mreumstance is held ~nvalld by any court of
competent junsthction, such holding shall not affect the val~chty of the remmmng portions of th~s
Agreement, and the pames hereby declare they would have enacted such remmnmg portions despite
any such invaldlty
5.12 Insurance. The CHAMBER shall, at a mmmmm, provide ansurance as follows
$500,000 Commercial General Liability, or $1,000,000 Event Insurance, covering
any event held on City property
Statutory Workers' Compensation and Employers' Llabthty
($100,000/$500,000/$100,000)
$500,000 Business Automobile Llablhty on any owned, non-owned or h~red
veluclas
The CITY must be named as an ad(htional insured on all pohmes (except Workers' Compensation)
and proof of coverage shall be submitted prior to any payment by the CITY
Page 7
EXECUTED tlus _~_~_~ day o f ~~ ,1999
THE CITY OF DENTON, TEXAS
JACK M~R, MAYOR
ATTEST APPROVED AS TO LEGAL FORM
JF~qlI~VAL~ERS~ - ~'-HE'~RBERT L PROUTY/
C~Y SECRETARY CItY ATTORNE~
DENTON B~CK C~A~ER OF
COMMERCe// i~
~tn/D~rector
ATTE~;I~ APPROVED AS TO LEGAL FORM
By~0~..(/t~ ~J~~ By
Secretary
Page 8
Exhibit A
Denton Black Chamber of Commerce
Budget Proposal
Program Year 2000
Requested
Program I Activity Amount
Advertising )lues Festival $ 2,000
Art
Insurance 2,000
Long Distance 750
Artists 31ues Festival $ 4,250
Sound Equipment &
Technicians Blues Festival 1,000
Total
Exhibit B
EXAMPLE
FINANCIAL REPORT
Program Year 2000
1ST 2ND 3RD 4TH BUDGET
QUARTER QUARTER QUARTER QUARTER YEAR TO VS
(Jan-Mad (Apr. Jun) (Jul. Sap) (Ocr. Dec) DATE ACTUAL
$o $o $o $o $o $o
$o $o $o $o $o $~o,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 i,O00
0 0 0 0 0 %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
Date Submitted Program Director