1998-419AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON HOLIDAY FESTIVAL
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
fi_Eff,_TJ_Q.h~ That the Mayor ~s hereby authorized to execute an agreement between the
City of Denton and the Denton Hohday Festival Association, Inc for the payment and use of
hotel tax revenue, under the terms and conditions contmned m the agreement, a copy of which ~s
attached hereto and made a part hereof
SECTION II That th~s ordinance shall become effective ~mmedmtely upon ~ts passage
and approval
PASSEDANDAPPROVEDth~sthe ~~ dayof ~ ,
1998
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT ~L PR?~UT~Y.~GI~Y A~EY
D~N'I ON HOLIDAY FESq/IVAL b~O~,tA Ctu¢/~ iNc,. ,~
~S AO~E~NT made be~een ~e C~W of Denton, Text, a m~cxpE co~ora~on
(~e "CIT~'), ~d ~e Denton Hobby Festive Assocm~on, Inc, a legE en~ mco~o~ted ~der
~e laws of~e State of Tex~ (~e "ASSOCIATION")
W~AS, Tex T~ Code ~3S1 002 au~on~s ~e CITY to leW by or~ce a
mmcxpE hotel occup~cy ~ ("hotel ~") not excee~g seven percem (7%) of ~e Co~ldera~on
prod by a homl occup~t, ~d
~E~AS, by ordln~ce, ~e CITY h~ prowded for ~e ~sessmem ~d collectmn of a
m~clpE hotel occup~cy t~ m ~e Cx~ of Denton of seven percem (7%), ~d
~AS, Tex T~ Code ~3~1 101(a) au~onzes ~e CITY to ~e revenue ~om ~ts
mmclpE hotel occup~cy ~ to promote to.sm ~d ~e conven~on ~d hotel md~ by
adve~smg ~d conduc~g sollCl~O~ ~d promo~onE pro~ to a~act to~s~ ~d conven~on
delegates or regls~ts to ~e m~mp~:~ or xts <c~,, ~d
~AS, ~e ASSOCIATION xs well eqmpped to peffo~ ~ose act~vmes, ~d
~AS, Tex T~ Code ~351 101(c) au~onzes ~e CITY to delegate by contact ~
~e ASSOCIATION, ~ ~ independent en~, ~e m~agement ~d supe~smn of pro.ms ~d
acaw~es of ~e ~pe described hereznabove ~ded ~ revenue ~om ~e mmc:p~ hotel
occup~cy ~,
NOW, ~FO~, ~n comlderatmn of ~e perforate of ~e mu~ cove~m ~d
promses con. ed here~n, ~e CITY ~d ~e ASSOCIATION agree ~d con~act ~ follows
1. flOTEL T~ ~UZ PA~AENT
z.~ Conz~derat~oa. For ~ ~n com~deratmn of ~e ac~wucs to be pcffo~ed by ~c
ASSOCIATION ~der ~s A~eement, ~e CITY a~ees to pay to ~e ASSOCIATION a pomon of
~e hotel t~ revenue collected by ~e CITY at ~c rates ~d m ~c m~er specffied hemm (such
paymenm by ~c CITY to ~e ASSOCIATION somemes herem refc~cd to ~ ~e "a~eed
paymenB' or "hotel ~ ~ds")
Amoant of Paymen~a.
(a) As used m ~s Agreemem, ~e following terns s~l Mvc ~c follomng specific
memgs'
0) ~e tern "hotel t~ revenue" shall me~ ~e gross momes collected ~d
received by ~c C~ ~ mmmpal hotel occup~cy t~ at ~e rate of seven percent (7%) of
· e price prod for a room tn a hotel, p~su~t to Texas T~ Code 351 002 md C~
Ordinance Hotel tax revenue wili include penalty and interest related to the late
payments of the tax revenue by the taxpayer
(Ii) 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
eolleeted through the 22nd day of the month follovang the close of the relevant fiscal year
(ill) The term "base payment amount" shall mean a net amount of money equal
to the total hotel tax revenue collected by the CITY during any relevant period of tmae (t e,
fiscal year or fiscal quarter), less (I) attomey and auditing costs incurred during such
relevant period of tune for costs of collection or auditing of hotel taxpayers Attorney and
auditing costs include fees prod to attorneys or agents not tn the regular employ of the CITY
for winch attorneys or agents effect compliance or collection of the hotel tax from taxpayers,
and (2) court costs and other expenses recurred m litigation against or auchtxng of such
taxpayers
(iv) The term "contract quarter" shall refer to any quarter of the calendar year m
winch tins A~eement ts in force Contract quarters will end on March 31st, June 30t~,
September 30"', and December 3 l~t of each contract year
(b) In return for saUsfaetory performance of the activities set forth In this Agreement
mad all attachments hereto, the CITY shall pay to ASSOCIATION an amount of money In each
contract year equal to the fixed contract amount of Three Thousand Dollars ($3,000) Tins
amount will be divided into no more than two payments Each payment ts subject to receipt of
unused funds from the prior contract period and the receipt of the required quarterly reports
~ 3 Oate~ of Payment.
(a) The term "payments" shall mean payments by the CITY to the ASSOCIATION of those
amounts specified in ~[1 2, above, as determined by the hotel tax revenue collected
(b) In return for the satisfactory performance of the activities set forth in tins contract and
all attachments thereto, CITY shall pay the ASSOCIATION the agreed payments specified tn 'lIl 2
above by no more than two payments, paying the fixed contract amount during the 1st and 2nd
quarter of the calendar year If a second payment ts due, that payment shall be paid upon receipt
of the required reports and after the 25t~ day following the last day of the contract quarter If
quarterly financial and performance reports are not received w~th~n thirty (30) days of the end of the
applicable quarter, the recipient may be held in breach of tins Agreement The CITY may withhold
the quarterly payment(s) unlal the appropriate reports are received and approved, winch approval
shall not unreasonably be v~thheld
Other hmxtat~ons re~aratag eonsidera~aon.
(a) The funding of tlus project in no way commits thc CITY to future funding of tins
program beyond the current contract penod Any future funding is solely thc responslblhty of the
ASSOCIATION
P~e2
(b) It is expressly understood that flus contract m no way obligates the General Fund or any
other momes or credits of the CITY
(c) CITY may wxthhold further allocations if CITY detenmnes that ASSOCIATION's
expenchtures deviate materially from their approved budget
Il riSE OF HOTEL '~.t~ ~,',£~i~J~,
~ 2 ~J~e of F,~naz. For and m consldcra*aon of thc payment by thc CITY to thc ASSOCIATION of
the agreed payments of hotel tax funds specified above, the ASSOCIATION agrees to usc such
hotel tax funds only for advcmsmg and conducting sohc~tatlons and promotional programs to attract
tounsts and conven'aon delegates or registrants to the mumclpallty or its vlcn~ty as authorized by
TEX TAX CODE §351 101(a) Funds for any calendar year winch are unused by rmdmght December
31st of that year shall be refunded to CITY w~flun flurry (30) days
z/, A. dmla~ra~nve Co~t~. The hotel tax funds received from the CITY by the ASSOCIATION
may be spent for day-to~day operations, supplies, salaries, office rental, travel expenses, and other
adnumstratlve costs that are recurred directly ,n the performance by the ASSOCIATION of those
activities specified in ~,2 1 above and are allowed by TEX TAX CODE §351 101 (f)
/ 3 S0ee~e l~estr~e~oaa Da U~e ofl?uads.
(a) That portion of total admxmstrat~ve costs of the ASSOCIATION for winch hotel tax
funds may be used shall not exceed that portion of the ASSOCIATION's admxmstrat~ve costs
actually tncurred ~n conducting the ac'aw'aes 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 ac'avlty the primary purpose of wluch is not d~rectly related to the promouon of local tourism and
the conven'aon and hotel industry or the performance of the person's .lob m an efficxent and
professional manner
D3.. ~ECORDK~,EPING A2'~4D REP~'~c~C
(a) The ASSOCIATION shall prepare and subnut to the Cxty Manager of the CITY an
annual budget (see Exinint "A") as approved by the C~ty Council for each calendar year, for such
opera'aons of the ASSOCIATION in wbach the hotel tax funds shall be ,used by the
ASSOCIATION Tins budget shall specifically identify proposed expenditures of hotel tax funds
by the ASSOCIATION In other words, the CITY should be able to audxt specxfically where the
funds m the separate account relating to hotel tax funds w~ll be expended The CITY shall not pay
to the ASSOCIATION any hotel tax revenues as set forth in Section I of flus contract dunng any
fiscal year of flus Agreement unless a budget for such respective fiscal year has been approved m
writing by the Denton City Council authonzmg the expenchture of funds Fmlure to submit an
annual budget may be considered a breach of contract, and if not remedied is considered grounds for
tenmnatlon of flus Agreement as stated in paragraph 4 2
Page 3
(b) The ASSOCIATION acknowledges that the approval of such budget by the Denton
C~ty Council creates a fiduciary duty m the ASSOCIATION w~th respect to the hotel tax funds prod
by the CITY to the ASSOCIATION under ttus Agreement The ASSOCIATION shall expend
hotel tax funds only m the manner and for the purposes specified ~n ttus Agreement, TEX T^X
CoDe {}351 101(a) and m the budget as approved by the CITY
3.2 Separate Aecount~ The ASSOCIATION shall mmntmn any hotel tax funds paid to the
ASSOCIATION by the CITY ~n a separate bank account wath segregated accountxng, such that any
reasonable person can revtew the source of expenditures of tax funds A bank reconmhauon report
(see Exh~blt "B") xs reqmred wath each quarterly report
2* 3 r~inaneml R~eords The ASSOCIATION shall maintain complete and accurate financtal
records of each expenditure of the hotel tax funds made by the ASSOCIATION These funds are
reqmred to be clasmfied as restricted funds for audited financial purposes, and may not be used for
supporting serrates, including, but not lamted to, auditing fees and attorney's fees Upon
reasonably advance written request of the Denton C~ty Councd, the C~ty Manager or designate, or
any other person, shall make such financial records avadable for inspection and rewew by the party
making the request ASSOCIATION understands and accepts that all such financial records, and
any other records relating to tlus Agreement shall be subject to the Pubhc Information Act, T~x
GOV'T CODE, ch 552, as hereat~er amended
~ r Quarterly Reporta A/~er watml receipt of hotel tax funds, and wattun thirty days after the
end of every quarter thereafter, anal all funds have been expended and reported to the CITY,
ASSOCIATION shall furmsh to CITY (1) a performance report of the work performed under tlus
Agreement describing the act~wtles performed pursuant to tbas Agreement dunng that contract
quarter, and (2) a hst of the expenchtures made wath regard to hotel tax funds pursuant to T~x T^x
CODe §351 101(c) Both the performance and expenditure reports vail be xn a form e~ther
determined or approved by the Cxty Manager or desxgnate (see Exbab~t "B") The ASSOCIATION
shall respond promptly to any request from the Ctty Manager of the CITY for add~laonal
mformatlon relaUng to the actawt~es performed under thxs Agreement
-*.5 i~ot/ee of.~VI, eetmg~. The ASSOCIATION shall g~ve the Cxty Manager of the CITY
reasonable advance written nouce of the t~me and place of all meeungs of ASSOCIATION's Board
of Dtrectors, as well as any other meeting of any constituency of the ASSOCIATION at wtuch tlus
Agreement or any matter the subject of tbs Agreement shall be considered Tlus prowslon shall not
be deemed to require the ASSOCIATION to gxve notme of any executive session of the Execulave
Cormmttee of the ASSOCIATION
U¢. TEItM A3~D T~ ~I~/~NA~.~1~
~.I~ Term. The term of thts Agreement shall commence on January 1, 1999 and terminate at
m~dmght on December 31, 1999 Thts term shall be a period of one year
~' z Termination qz~'lthont Caaae.
(a) Th~s Agreement may be terminated by e~ther party, w~th or wathout cause, by glvmg
the other party sixty (60) days advance written nouce
Page 4
(b) In the event th~s contract ts termtnated by either party pursuant to Sectton ~ 2(a),
the CITY agrees to retmburse the ASSOCIATION for any contractual obhgattons of the
ASSOCIATION undertaken by the ASSOCIATION tn satisfactory performance of those
acttmttes specffied tn ~12 1 and 2 2 above and that were approved by the Cotmc~l through the
budget, as noted tn ~3 1 This reimbursement ts condtttoned upon such contractual obhgattons
havmg been incurred and entered rata tn the good fatth performance of those servmes
contemplated tn ~2 I and 2 2 above, and further condtttoned upon such contractual obhgattons
havmg a term not exceedtng the full term of tins Agreement Notwtthstandtng any provtston
hereof to the contrary, the obhgatton of the CITY to reimburse the ASSOCIATION or to assume
the performance of any contractual obhgataons of the ASSOCIATION for or under any contract
entered rata by the ASSOCIATION as contemplated herein shall not exceed 66 2/3% of the
current quarterly payment
(c) Further, upon termination pursuant to ~14 2(a), the ASSOCIATION w~ll prowde the
CITY 1) Wtthm 10 business days from the termtnatlon notfficatton, a short-term budget of
probable expenditures for the mmmmng 60 day period between termmatton notfficataon and
contract termination Tins budget will be presented to Counctl for approval wtthm 10 business
days after recetpt by CITY If formal approval ts not gtven wtthtn 10 bus~ness days and the
budget does not contmn any expenchtures that would be prohtbtted by the Texas Tax Code, and
~s wttinn the current contractual period approved budget, the budget wdl be considered
approved, 2) Wttinn 30 days, a full accounttng of all expenditures not prevtously audtted by the
Ctty, 3) Wtthtn 5 bumness days of a request from the CITY, a hstlng of expenditures that have
occurred since the last reqmred reporting period, 4) a final accounting of all expenditures and tax
funds on the day of termination The ASSOCIATION will be obhgated to return any unused
funds or funds determined to be used tmproperly Any use of remmmng funds by the
ASSOCIATION after termtnatlon ts condlttoned upon such contractual obhgattons having been
incurred and entered rata tn the good fatth performance of those servmes contemplated tn 2 1 and
2 2 above, and further condtttoned upon such contractual obhgattons having a term not
exceedtng the full term of this Agreement
,' A Au~:omahc Termmataan. Tins Agreement shall automatically tenTnnate upon the
occurrence of any of the following events
(a) The ternnnatlon of the legal erastence of the ASSOCIATION,
(b) The tnsolvency of the ASSOCIATION. the filing of a petttlon tn bankruptcy, e~ther
voluntarily or tnvoluntanly, or an assignment by the ASSOCIATION for the benefit of
creditors,
(c) The con'anuatton of a breach of any of the terms or condluons of tins Agreement by
either the CITY or the ASSOCIATION for more than tinrty (30) days after written notme of
such breach ts given to the breaching party by the other party, or
(d) The fmlure of the ASSOCIATION to submtt a fmanctal quarterly report winch comphes
w~th the reporting procedures reqmred herein and generally accepted accounting pnnc~ples
Page 5
pnor to the beg~nmng of the next contract term, or quarterly as required by Section 1 3
hereof
4.~, F~gnt to lmmedla~:e Termination Upon Li~:~.~on Notwlthstanchng any other provision
of thas Agreement, to tint,gate damages and to preserve evidence and issues for judmlal
determination, either party shall have the right to tenmnate ttus Agreement upon marnedlate
notice to the other party tn the event that any person has instituted hugataon concerning the
activities of the non-tenmnatang party, and the ternunatmg party reasonably believes that
such activities are reqmred or pml'nblted under tbas Agreement
~,.5 In the event that tbas Agreement is tenmnated pursuant to ~1~4 3 or 4 4, ASSOCIATION
agrees to refund any and all unused funds, or funds determined by the CITY to have been used
improperly, w~thln 30 days after termlnataon of this Agreement
5 ' ~aoconia~act ?ce Perfm-raaace of Service~ Nothing in tlus Agreement shall pmhab~t, nor
be construed to prol'ublt, the agreement by the ASSOCIATION w~th another private entaty, person,
or orgamzalaon for the performance of those services described tn ~[2 I above In the event that the
ASSOCIATION enters into any arrangement, contractual or otherv~se, with such other entity,
person or orgamzatlon, the ASSOCIATION shall canse such other entity, person, or orgamzataon to
adhere to, conform to, and be subject to all provisions, terms, and conditions ofth~s Agreement and
to TEX TAX CODE ch 351, including reporting reqmrements, separate funds maintenance, and
hrmtatlons and prolubluons pertamang to expenditure of the agreed payments and hotel tax funds
5 2 ~nd~pendent Con~'actor The ASSOCIATION shall operate as an independent contractor
as to all services to be performed under thas Agreement and not as an officer, agent, servant, or
employee of the CITY The ASSOCIATION shall have exclusive control of its operataons and
performance of services hereunder, and such persons, enUues, or orgamzat~ons performing the same
and the ASSOCIATION shall be solely responsible for the acts and omasslons of its directors,
officers, employees, agents, and subcontractors The ASSOCIATION shall not be considered a
partner or joint venturer wath the CITY, nor shall the ASSOCIATION be considered nor in any
manner hold itself out as an agent or official representative of the CITY
5.3 tnaemmfieahon. The ASSOCIATION agrees to lndemmfy, hold harmless, and defend the
CITY, its officers, agents, and employees from and against any and all clmms or stats for injuries,
damage, loss, or hablhty of whatever k~nd or character, arising out of or in connection wath the
performance I~y the ASSOCIATION or those services contemplated by tbas Agreement, mcludlng
all such clmms or causes of aclaon based upon common, constitutional or statutory law, or based, in
whole or in part, upon allegataons of negligent or intentional acts of ASSOCIATION, its officers,
employees, agents, subcontractors, hcensees and lnvltees
5 z A~s~g~raent. The ASSOCIATION shall not assign tins Agreement w~thout first obtmmng
the written consent of the CITY
Page 6
5 5 .Notice. Any notice required to be given under th~s Agreement or any statute, ordinance, or
regulalaon, shall be effective when given in writing and deposited tn the Umted States mml, eemfied
mml, return receipt requested, or by hand-delivery, addressed to the respective pames as follows
CITY ASSOCIATION
City Manager Yvonne Jenkins
City of Denton Denton Holiday Festival Foundation,
215 E MeKmney P O Box 2765
Denton, TX 76201 Denton, Texas 76202-2765
5.~ ~.auceme~a~ Th~s Agreement and each provision hereof, and each and every right, duty,
obhgataon, and liability set forth herein shall be binding upon and inure to the benefit and obhgataon
of the CITY and the ASSOCIATION and their respective successors and assigns
5 / Agpficalaoa of Laws. All terms, conditions, and provisions of tbas Agreement are subject
to all applicable federal laws, state laws, the Charter of the C~ty of Denton, all ordinances passed
pursuant thereto, and all judicial deterrmnataons relative thereto
b.g Exeh~s~ve Agceemea~. Tbas Agreement contmns the entire understanding and consl~tutes
the enure agreement between the pames hereto concermng the subject matter contained hereto
There are no representataons, agreements, arrangements, or understandings, oral or written, express
or unphed, between or among the pames hereto, relating to the subject matter of th~s Agreement,
wbach are not fully expressed hereto The terms and conchtlons of tbas Agreement shall prevml
notwithstanding any variance In tbas Agreement from the terms and conditions of any other
document relalang to tbas transaction or these transac~ons
b ~ Daphcate Ore.aais Tlus Agreement is executed tn duplicate originals
5 25 fiteaamga. The headings and subheadings of the various sectmns and paragraphs of flus
Agreement are tnserted merely for the purpose of convemence and do not express or tmply any
hrmtauon, defimt~on, or extension of the specific terms of the sectmn and paragraph so designated
5 2~ §evacabifil¥ If any section, subsection, paragraph, sentence, clause, phrase or word in thrs
Agreement, or application thereof to any person or circumstance ts held invalid by any court of
competent junsdictmn, such holding shall not affect the validity of the remmmng portions of th~s
Agreement, and the pames hereby declare they would have enacted such remalmng portions desptte
any such invalidity
THE CITY OF DENTON, TEXAS
JACK~/J~r~ER, MAYOR
Page 7
ATTEST APPROVED AS '10 LkG~ FORM
By _ J,g~ B ~ .~
JEI~{~IFER WALTERS, ~ - HE'ERtL PRO~,~, /~
CIW SEC~T~Y CITY AWO~E9 /
/
DENTON HOLI~ FESTIV~
asso?T OS,
Page 8
0CT-22-1998 16 06 FROM CITY OF ARGYLE TO 95497Pll P 03
0~.1~¥ I ,~ ~',d*~} $0 $0 $0 $0 $0 $3.000
Irl~ I h.~. ~) 0 0 0 0 0 0
Io~l I a.~,~ $ ~ ~ $0 $0 $0 $0 $0 $3,000
~ ~ t'~.~.., $~ d~,~ $0 $0 $0 $0 $0 $1,000
J~,~thJ ' ~ 0 0 0 0 0 2,000
~fl A,~.~m,~ $ ~} $0 $0 $0 $0 $0 $3,000
I o~r~ i ~ll~. n. ~fl. ~ u~ $0 $0 $0 $0 $0 $3,000
~?,~ ~ ,¥ h $0 : $o ,. $o $o $o
Data Submitted Program Director