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1999-305 ORDINANCE NO ~YO~-- AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN INTERLOCAL AGREEMENT BETWEEN THE CITY OF DENTON AND DENTON COUNTY FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE IN SUPPORT OF THE COURTHOUSE- ON-THE SQUARE MUSEUM, AND PROVIDING AN EFFECTIVE DATE WHEREAS, Tex Tax Code §351 101(a) authorizes the C~ty of Denton, Texas to use revenue from its mummpal hotel occupancy tax to promote tourism and the convention and hotel Industry by advertmmg and conducting solicitations and promotmnal programs to attract tourists and convention delegates or regmtrants to the mammpahty or ~ts weunty, as well as to engage m bastoneal restoration and preservation pro3eets and activities and advertising and conducting sohc~tat~ons and promotaonal programs to encourage tourists and convention delegates to wmt preserved,bastone sites and museums, and WHEREAS, the County of Denton, Texas ~s well eqmpped to perform those actlvlt, es by its operatmn of the Courthouse-on-the-Square Museum, and WHEREAS, Tex Tax Code §351 101(c) authorizes the C~ty of Denton, Texas to delegate by contract with the County of Denton, Texas, as a governmental entity, the management and supermmon of programs and act~wtles of the type described hermnabove funded w~th revenue from the mumc~pal hotel occupancy tax, and WHEREAS, both the C~ty of Denton, Texas and the County of Denton, Texas have a secondary source of authority to enter rote an lnterlocal cooperation agreement, pursuant to Chapter 791 of the Texas Government Code, as the agreement m authorized by both governmental bothes, the agreement states the purpose, terms, rights, and duties of the contracting part~es, the conmderataon xs being prod by C~ty of Denton, Texas out of current revenues, the compensation ~s fmr, and the services to be performed are "museum servmes" authorized under §791 003(3)(F) of the Texas Government Code, winch each party is authorized to perform mrhwdually, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the Mayor ~s hereby authorized to execute an lnterlocal agreement between the City of Denton and Denton County for the payment and use of hotel tax revenue m support of the Courthouse-On-The Square Museum, under the terms and contht~ons contmned ~n the agreement, a copy of whmh xs attached hereto and made a part hereof SECTION II That thru orchnance shall become effective Immediately upon its passage and apprOval 1999 JAC~'~' ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY PAGE 2 AGREEMENT BETWEEN THE CITY OF DENTON AND DENTON COUNTY, TEXAS (COURTHOUSE ON THE SQUARE MUSEUM) (CY2000) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEMENT made between the City of Denton, Texas, a mumcipal corporation (the "CITY"), and County of Denton, Texas, a governmental entity existing under the laws of the State of Texas, contracting on behalf of its Courthouse-on-the-Square Museum (collectively, the "MUSEUM") WHEREAS, Tex Tax Code §351 002 authorizes the CITY to levy by ordinance a municipal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the cous~deratton prod by a hotel occupant, and WHEREAS, by ordinance, 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 its mumclpal hotel occupancy tax to promote tourism and the convention and hotel industry by advertising and conductang sohcltataons and promoUonal programs to attract tourists and conventton delegates or registrants to the mumelpahty or its mclmty, as well as to engage m tustoncal restorataon and preservation projects and act~wtles and advertising and conducting sohcitatlons and promotaonal programs to encourage tourists and convention delegates to visit preserved bastonc sites and museums, and WHEREAS, the MUSEUM is well eqmpped to perform those actlmt~es, and WHEREAS, Tex Tax Code §351 101(c) authorizes the CITY to delegate by contract with the MUSEUM, as a governmental entaty, the management and supervlsmn of programs and activities of the type described heremabove funded with revenue from the mummpal hotel occupancy tax, and WHEREAS, both CITY and MUSEUM have a secondary source of authority to enter into this Agreement as an lnterlocal cooperation agreement, pursuant to Chapter 791 of the Texas Govemment Code, as the Agreement is anthonzed by both governmental boches, the Agreement states the purpose, terms, rights, and duties of the contracting parties, the consideration is being prod by CITY out of current revenues, the compensation is fmr, and the services to be performed are "museum sermces" authorized under §791 003(3)(F) of the Texas Government Code, wbach each party is anthonzed to perform individually, NOW, THEREFORE, m eouslderatmn of the performance of the mutual covenants and promases contmned hereto, the CITY and the MUSEUM agree and contract as follows I HOTEL TAX REVENUE PAYMENT I I Consideration. For and m eonslderataon of the actavltles to be performed by the MUSEUM under flus Agreement, the CITY agrees to pay to the MUSEUM a portion of the hotel tax revenue collected by the CITY at the rates and m the manner specffied herein (such payments by the CITY to the MUSEUM sometxmes herein 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 specffic meamngs (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 room in a hotel, pursuant to Texas Tax Code 351 002 and C~ty Orthnance Hotel tax revenue w~ll ~nclude penalty and interest related to the late payments of the tax revenue by the taxpayer (n) The term "Collection penod" wdl mean the collectmn period for the CITY's fiscal year It will include hotel tax revenue due to the C~ty 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 t~me (z e, fiscal year or fiscal quarter), less (1) attorney and auditing costs mcurred dunng such relevant penod of t~me for costs of collection or auditing of hotel taxpayers Attorney and auchtmg costs include fees prod to attorneys or agents not m the regular employ of the CITY for wi'ach attorneys or agents effect comphance or collection of the hotel tax from taxpayers, and (2) court costs and other expenses recurred m ht~gat~on agmnst or auchtmg of such taxpayers 0v) The term "contract quarter" shall refer to any quarter of the calendar year m wluch flus A~eemant ~s in force Contract quarters will end on March 31st, June 30th, September 30~', and December 31a of each contract year (b) In return for satisfactory performance of the act~vmes set forth ~n this Agreement and all attachments hereto, the CITY shall pay to MUSEUM an amount of money ~n each contract year equal to the lesser mount of Seven and Nmety-One One Hundredths percent (7 91%) of the annual base payment amount or the fixed contract amount of Eighty-Slx Thousand, E~ght Hundred Thirteen Dollars ($86,813) This amount will be chmded into quarterly payments equal to 25% of the annual fixed contract amount, unless the CITY can show w~th reasonable certmnty that the annual base payment amount wall be less than originally estimated for the fiscal year The fourth quarterly payment wall represent 25% of the fixed contract amount or the unpmd remmnder of 7 91% 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 reqmred quarterly reports 1 3 Dates of Payments. (a) The term "quarterly payments" shall mean payments by the CITY to the MUSEUM of those amounts specified ~n ¶1 2, above, as detemuned by the hotel tax revenue collected Page 2 (b) Each quarterly payment shall be pa~d 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 within tlurty (30) days of the end of the applicable contract quarter, the remplent may be held m broach of flus Agreement The CITY may wuthhold the quarterly payment(s) until the appropriate reports are received and approved, wluch approval shall not unreasonably be vathheld 1 4 Other limitations regarding consideration (a) The fimchng of flus proJeCt m no way comnuts the CITY to future funding of flus program beyond the current contract period Any future funding is solely the responsibility of the MUSEUM (b) It is expressly understood that flus contract in no way obligates the General Fund or any other momes or credits of the CITY (c) CITY may wathhold further allocations if CITY determines that MUSEUM'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 MUSEUM of the agreed payments of hotel tax funds specified above, the MUSEUM agrees to use such hotel tax funds only for advertising and conducting sohcltataons and promotional programs to attract tourists and conventaon delegates or registrants to the mummpahty or its vmimty, as well as to engage in historical restoratton and preservataon projects and activities and advertising and conducting sohcltatlons and promotional programs to encourage tourists and convention delegates to mint preserved lustonc sacs and museums, as authorized by TEX TAX CODE §351 101(a)(3) and (a)(5) Funds for any calendar year which are unused by mldmght December 31st of that year shall be refunded to CITY within flurty (30) days 2.2 Administrative Costs The hotel tax funds received from the CITY by the MUSEUM may be spent for day-to-day operations, supphes, salaries, office rental, travel expenses, and other admlmstrative costs that are incurred chreCtly m the performance by the MUSEUM of those actlwtles specified m ¶2 1 above and are allowed by TEX TAX CODE §351 101(f) 2 3 Specific Restrictions on Use of Funds. (a) That portion of total admunstrat~ve costs of the MUSEUM for which hotel tax funds may be used shall not exceed that portton of the MUSEUM's admlmstratlve costs actually mcurred in condueiang the activities spemfied in ¶2 1 above Co) Hotel tax funds may not be spent for travel for a person to attend an event or conduct an actlwty the primary purpose of winch is not directly related to the promotion of local tourism and the convention and hotel industry or the performance of the person's job in an efficient and professional manner Page 3 III. RECORDKEEPING AND REPORTING REQUIREMENTS 3 1 Budget. (a) The MUSEUM shall prepare and subrmt to the City Manager of the CITY an annual budget (see Exhtblt "A") as approved by the City Council for each calendar year, for such operations' of the MUSEUM m which the hotel tax funds shall be used by the MUSEUM This budget shall specifically identify proposed expenditures of hotel tax funds by the MUSEUM In other words, the CITY should be able to audit specifically where the funds m the separate account relating to hotel tax funds will be expended The CITY shall not pay to the MUSEUM any hotel tax revenues as set forth m Seetmn I of ttus contract dunng any fiscal year of flus Agreement unless a budget for such respectave fiscal year has been approved m writing by the Denton City Council authorizing the expenchture of funds Failure to submit an annual budget may be considered a breach of contract, and if not remethed is considered grounds for termanat~on of this Agreement as stated m paragraph 4 2 (b) The MUSEUM acknowledges that the approval of such budget by the Denton City Council creates a fiduciary duty m the MUSEUM with respect to the hotel tax funds prod by the CITY to the MUSEUM under this Agreement The MUSEUM shall expend hotel tax funds only m the manner and for the purposes specified m tbas Agreement, TEx TAX CODE §351 101(a) and m the budget as approved by the CITY 3.2 Separate Accounts The MUSEUM shall m0ant0an any hotel tax funds paid to the MUSEUM by the CITY in a separate bank account with segregated accountang, such that any reasonable person can review the source of expenditures of tax funds A bank reconciliation report (see Exhibit '~B") ~s reqmred with each quarterly report 3 3 Financml Records. The MUSEUM shall maintain complete and accurate financial records of each expenchture of the hotel tax funds made by the MUSEUM These funds are required to be classified as restricted funds for audited financial purposes, and may not be used for suppo~ng serwees, including, but not hmlted to, auditing fees and attorney's fees Upon reasonably advance written request of the Demon 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 MUSEUM understands and accepts that all such financial records, and any other records relating to this Agreement shall be subject to the Public Information Act, TEx GOV'T CODE, ch. 552, as hereafter amended 3.4 QUarterly Reports. Within fi'arty days a_~ter the end of every contract quarter, MUSEUM shall furmsh to CITY (1) a performance report of the work performed under tl~s Agreement descnbmg the actavltaes performed pursuant to this Agreement dunng that contract quarter, and (2) a hst of the expenditures made with regard to hotel tax funds pursuant to TEx TAx CODE §351 101(c) Both the performance and expenditure reports will be in a form either deterrmned or approved~ by the C~ty Manager or designate (see Exhibit "B") The MUSEUM shall respond promptly to any request fxom the City Manager of the CITY, or designate, for adchtlonal information relatang to the actawt~es performed under this Agreement Page 4 3 5 Not~ce of Meetings. The MUSEUM shall give the Caty Manager of the CITY reasonable advance written notate of the tune and place of all meetings of MUSEUM's Board of D~rectors, as well as any other meeting of any constituency of the MUSEUM at whmh tbas Agreement or any matter the subject of ttus Agreement shall be considered This prowsaon shall not be deemed to reqmre the MUSEUM to g~ve nntme of any executave sessxon of the Executive Comnuttee of the MUSEUM IV TERM AND TERMINATION 4 1 Term. The term of ttus Agreement shall commence on January 1, 2000 and terminate at mldmght on December 31, 2000 Tl~s term shall be a period of one year 4.2 Termination Without Cause. (a) Thas Agreement may be terminated by either party, wxth or wathout cause, by gavmg the other party sixty (60) days advance written notme (b) In the event this contract ~s terminated by e~ther party pursuant to Sectmn 4 2(a), the CITY agrees to reimburse the MUSEUM for any contractual obhgat~ons of the MUSEUM undertaken by the MUSEUM m satisfactory performance of those aet~vataes spemfied in ¶¶2 1 and 2 2 above and that were approved by the Council through the budget, as noted in ¶3 1 Thas reimbursement ~s conditioned upon such contractual obhgatmns hawng been recurred and entered into m the good froth performance of those services contemplated m ~¶2 1 and 2 2 above, and further condataoned upon such contractual obhgatmns having a term not exceeding the full term of this Agreement Notwithstanding any prows~on hereof to the contrary, the obhgatxon of the CITY to reimburse the MUSEUM or to assume the performance of any contractual obhgatlons of the MUSEUM for or under any contract entered into by the MUSEUM as contemplated hereto shall not exceed 66 2/3% of the current quarterly payment (c) Further, upon termmatmn pursuant to ¶4 2(a), the MUSEUM wall promde the CITY 1) W~thln 10 business days from the termmatmn notfficatmn, a short-term budget of probable expendatures for the remaining 60 day period between termmatmn notaficatmn and contract termmatmn Tfus budget will be presented to Couneal for approval wathm 10 business days after receipt by CITY If formal approval ~s not given w~thm 10 busaness days and the budget does not contain any expendatures that would be proh~bated by the Texas Tax Code, and is w~thm the current contractual period approved budget, the budget will be considered approved, 2) Within 30 days, a full accounting of all expendxtures not prevmusly authted by the Caty, 3) Within 5 business days of a request from the CITY, a hstlng of expendatures that have occurred since the last reqmred reporting period, 4) a final accountmg of all expenditures and tax funds on the day of termination The MUSEUM wall be obhgated to return any unused funds or funds determined to be used improperly Any use of remmnmg funds by the MUSEUM after notfficatlon of termination as condatmned upon such contractual obhgataons havang been recurred and entered into m the good froth performance of those servaces contemplated m 2 1 and 2 2 above, and further condatmned upon such contractual obhgatmns having a term not exceeding the full term of ttus Agreement P~e5 4.3 Automatic Termination. This Agreement shall automatically tenmnate upon the occurrence of any of the followmg events (a) The temunatlon of the legal existence of the MUSEUM, (b) The insolvency of the MUSEUM, the fihng of a petition in bankruptcy, either voluntarily or involuntarily, or an assignment by the MUSEUM for the benefit of crechtors, (c) The continuation of a breach of any of the terms or conditions of th~s Agreement by either the CITY or the MUSEUM for more than tbarty (30) days after written notme of such breach is given to the breactung party by the other party, or (d) The fiulure of the MUSEUM to subnut a financial quarterly report wtuch complies w~th the reporting procedures reqmred herein and generally accepted accounting pnnelples prior to the beginning of the next contract term, or quarterly as reqmred by Section 1 3 hereof 4 4 Right to Immediate Termination Upon Llt~gaaon. Notwithstanding any other provision of ttus Agreement, to n~utlgate damages and to preserve evidence and issues for judicial determination, either party shall have the right to tenmnate tlus Agreement upon tmmedmte 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 behoves that such activities are required or pmtublted under this Agreement 4 5 In the event that tlus Agreement is terminated pursuant to ¶¶4 3 or 4 4, MUSEUM agrees to refund any and all unused funds, or funds determined by the CITY to have been used improperly, within 30 days after termmation of this Agreement V. GENERAL PROVISIONS 5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prolublt, nor be construed to prolublt, the agreement by the MUSEUM with another private entity, person, or orgamzatlon for the performance of those services described in ¶2 1 above In the event that the MUSEUM enters mto any arrangement, contractual or otherwise, with such other entaty, person or orgamzat~on, the MUSEUM shall cause such other entity, person, or organlzataon to adhere to, conform to, and be subJeCt to all provisions, terms, and conditions of this Agreement and to TEx TAX CODE ch 351, mcludmg reporting reqmremants, separate funds maintenance, and hmatatlons and probabltaons pertalmng to expenchture of the agreed payments and hotel tax funds 5 2 Independent Contractor The MUSEUM shall operate as an mdependent contractor as to all services to be performed under this Agreement and not as an officer, agent, servant, or employee of the CITY The MUSEUM shall have exclusive control of as operataons and performance of services hereunder, and such persons, entities, or organizations performing the same and the MUSEUM shall be solely responsible for the acts and onnsslons of its directors, officers, employees, agents, and subcontractors The MUSEUM shall not be considered a partner or joint venturer wath the CITY, nor shall the MUSEUM be considered nor m any manner hold itself out as an agent or official representalave of the CITY Page 6 5 3 Indemnification. To the extent authorized by law, the MUSEUM agrees to lndemmfy, hold harmless, and defend the CITY, its oftieers, agents, and employees fi.om and agmnst any and all clmms or suits for injuries, damage, loss, or habthty of whatever land or character, arising out of or m connectmn w~th the performance by the MUSEUM or those services contemplated by flus Agreement, including all such clmms or causes of actmn based upon common, eonstltutmnal or statutory law, or based, m whole or m part, upon allegataons of negligent or ~ntenttonal acts of MUSEUM, its officers, employees, agents, subcontractors, hcensees and mwtees 5 4 Assignment. The MUSEUM shall not assign thts Agreement without first obtalmng the written consent of the CITY 5 5 Notice Any notaeo required to be given under flus Agreement or any statute, orchnaneo, or regulation, shall be effective when gnven m writing and deposited m the Umted States marl, certified marl, return receipt requested, or by hand-dehvery, addressed to the respective parties as follows CITY MUSEUM City Manager Denton County Courthouse-On-The Square City of Denton Museum 215 E McKanney Courthouse-On-The-Square Denton, TX 76201 Georgia Caraway, Director 110 W Hickory St Denton, Texas 76201 5 6 Inurement. Ttus Agreement and each provision hereof, and each and every right, duty, obligation, and hablhty set forth herein shall be binding upon and inure to the benefit and obhgat~on of the CITY and the MUSEUM and their respective successors and assigns 5 7 Applicat~on of Laws All terms, condltmns, and provisions of ttus Agreement are subject to all applicable federal laws, state laws, the Charter of the C~ty of Denton, all orchnances passed pursuant thereto, and all judicial determmatmns relative thereto 5 8 Exclusive Agreement. Tl~s Agreement contains 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 understandings, oral or written, express or lmphed, between or among the part,es hereto, relating to the subject matter of fins Agreement, which are not fully expressed hereto The terms and cond~taons of flus Agreement shall prevml notwithstanding any variance in flus Agreement fi.om the terms and conditions of any other document relating to tins transaction or these transactions 5 9 Duplicate Originals. Tlus Agreement ~s executed m duplicate ortglnals 5 10 }leadings. The headings and subheadings of the vanons sections and paragraphs of flus Agreement are inserted merely for the purpose of convenience and do not express or imply any hmltat~on, defimtlon, or extension of the specific terms of the section and paragraph so designated Page 7 5.11 Severabillty If any section, subsection, paragraph, sentence, clause, phrase or word ~n th~s Agreement, or apphcatton thereof to any person or mmumstance ~s held lnvahd by any court of competent jurisdiction, such hol&ng shall not affect the val~chty of the remaimng pomons of tbas Agreement, and the partaes hereby declare they would have enacted such rematmng portions despite any such mval~chty 5 12 Insurance. The MUSEUM shall pmwde insurance as follows 1 Statutory Workers' Compensation and Employers' Lmb~hty ($ lO0,O0O/$5oo,00o/$1oo,ooo) Proof of coverage shall be submitted prior to any payment by the CITY EXECUTEDtlus 7~dayof ~~ ,1999 THE CITY OF DENTON, TEXAS By JACKER, MAYOR ATTEST APPROVED AS TO LEGAL FORM J~,II~ER ~?ALTERS, ~L PROUTY, C~Y SECRETARY CITY ATTORNEY DENTON CTUNTY, T/~S~ COUNTY JUDGE ,,,,'" c. CO/J/??', .. ~ e.. ~ ' / APPROVED AS TO LEGAL FORM ATTEST ~ ~, ~. ~. By ~f/-t/Io By Secretary D'I'~?C~ A~I'O~RNg'i~ Page 8 Exhibit A Denton County Courthouse-on-the-Square Museum CHOS MUSEUM BUDGET PROPOSAL PROGRAM YEAR 2000 Requested Program/Activity Amount Advertising Brochures, Vimtor Tours $ 7,000 00 News?_~r, & Me?-~qe Adverfls,ng $ 7~000.00 Historical Staff Preservation Oo!!ecb0ns Manager Salary (paPal) $ 9,000 00 Contract ! ~hnr $ 1,000 00 Archival Preservation SupphA~ $ 6,000 0C Reference Books $ 500 00 Fumishlngs/Equ,p $10,500 00 $27~000.00 Admln!_-!~tlon Tourism Tounsm and Preservabon Tourism Director Salary (partial) $14,000 00 Benefits (paPal) $ 3,663 00 Director Salary (partial) $15,000 00 Adm n stratlve Secretary Salary (partial) $ 7,000 00 Part-Time Employee Salary $ 7,280 0C Student Interns (2) $ 4,000 00 Volunteer Recruitment/Tre,nlng $ 900 00 Membersh,p Dues $ 170 00 Office Supplies $ 800 00 $52r813 00 TOTAL $86~813.00 Exhibit B EXAMPLE FINANCIAL REPORT Program Year 2000 15T 2ND 3RD 4TH BUDGET QUARTER QUARTER QUARTER QUARTER YEAR TO VS (Apr-Jun) (JuI. Sep) (ocr. Dec) DATE ACTUAL $o $o $o $o $o $o $0 $0 $0 $0 $0 $10,000 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 i 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Date Submitted Program Director