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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