1998-423 ORDIN CE NO
AN 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
EFFECTWE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the Mayor is hereby authorized to execute an agreement between the
City of Denton and the Tejas Storytelling Association, Inc for the payment and use of hotel tax
revenue, under the terms and conditions contained m the agreement, a copy of which ~s attached
hereto and made a part hereof
aS._E..C~!! That this ordinance shall become effective immediately upon its passage
and approval
dayo
1998
JA~/~ILLER, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY,~CIZY-AT~I G~',IEY
/
AGREEMENT BETWEEN THE CITY OF DENTON AND
TEJAS STORYTELLING ASSOCIATION, INC (CY1999)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the C~ty of Demon, Texas, a mttmc~pal corporataon
(the "CITY"), and the Tejas Storytelling Assoc~ataon, Inc, a legal entity incorporated under the laws
of the State of Texas (the "ASSOCIATION")
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 conslderat~un
paid by a hotel occupant, and
WHEREAS, by ordmance, the CITY has provided for the assessment and collection of a
municipal hotel occupancy tax m the C~ty of Denton of seven percent (7%), and
WHEREAS, Tax Tax Code §351 101(a) authorizes the CITY to use revenue from ~ts
mun~elpal hotel occupancy tax to promote tourism and the conventaon and hotel industry by
advertasmg and eonduetang soheltat~ons and promotional programs to attract tourists and convention
delegates or registrants to the mumc~pal~ty or ~ts wclmty, and
WHEREAS, the ASSOCIATION ~s well eqmpped to perform those act~wt~es, and
WHEREAS, Tex Tax Code §351 101(c) authorizes the CITY to delegate by contract vath
the ASSOCIATION, as an independent enttty, the management and superws~on of programs and
actavmes of the type described heremabove funded w~th revenue from the mume~pal hotel
occupancy tax,
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promases contained here~n, the CITY and the ASSOCIATION agree and contract as follows
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and m cons~deratton of the actav~ties to be performed by the
ASSOCIATION under tins Agreement, the CITY agrees to pay to the ASSOCIATION a portaon of
the hotel tax revenue collected by the CITY at the rates and in the manner specified hereto (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 follovang specific
meamngs
0) The term "hotel tax revenue" shall mean the gross momes collected and
received by the C~ty as mumelpal hotel occupancy tax at the rate of seven percent (7%) of
the prtce paid for a room m a hotel, pursuant to Texas Tax Code 351 002 and City
Ordinance Hotel tax revenue wall include penalty and anterest related to the late
payments of the tax revenue by the taxpayer
(al) The term "Colleetaon period" will mean the collectaon period for the CITY's
fiscal year R will malude 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
(u0 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 tune 0 e,
fiscal year or fiscal quarter), less (1) attorney and audatmg costs xncurred dunng such
relevant period of tame for costs of eolleetaon or aufinlng of hotel taxpayers Attorney and
audltang costs include fees pa~d to attorneys or agents not m the regular employ of the CITY
for wtueh attorneys or agents effect eomphance or collectaon of the hotel tax from taxpayers,
and (2) court costs and other expenses ancurred in lmgauon against or auditing of such
taxpayers
0v) The term "contract quarter" shall refer to any quarter of the calendar year m
wbach fins Agreement is xn force Contract quarters wall end on March 31st, June 30th,
September 30th, and December 31st of each contract year
(b) In return for satisfactory performance of the actavmes set forth an fins Agreement
and all attachments hereto, the CITY shall pay to ASSOCIATION an amount of money m each
contract year equal to the lesser amount of Three and One One Hundredths of a percent (3 01%)
of the annual base payment amount or the fixed contract amount of Twenty-Five Thousand
Dollars ($25,000) Thas amount wall be dlvaded anto quarterly payments equal to 25% of the
annual fixed contract amount, unless the CITY can show wath reasonable certmnty that the
annual base payment amount wall be less than originally estamated for the fiscal year The fourth
quarterly payment wall represent 25% of the fixed contract amount or the unpaid remaander of
3 01% of the base payment amount, whichever as less Each quarterly payment ~s 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 an ¶1 2, above, as detenmned by the hotel tax revenue
collected.
(b) Each quarterly payment shall be paid upon receipt of the requared reports and after the
25th day followang the last day of the contract quarter If quarterly financial and performance
reports are not received within finrty (30) days of the end of the appheable contract quarter, the
reeaplent may be held m breach of fins Agreement The CITY may wathhold the quarterly
payment(s) until the appropriate reports are received and approved, wlueh approval shall not
unreasonably be wathheld
P~e2
1 4 Other hmitations regardmg consideration.
(a) The funding of tlus project m no way conmuts the CITY to future funding of tbas
program beyond the current contract period Any future funding ~s solely the respons~bthty of the
ASSOCIATION
(b) It ~s expressly understood that tlus contract in no way obhgates the General Fund or any
other momes or credxts of the CITY
(c) CITY may wathhold further allocataons ~f CITY determines that ASSOCIATION's
expenditures dewate materially f~om thetr approved budget
II. USE OF ItOTEL TAX REVENUE
2 1 Use of Funds For and m consaderat~on of the payment by the CITY to the ASSOCIATION of
the agreed payments of hotel tax funds specffied above, the ASSOCIATION agrees to use such
hotel tax funds only for advemsmg and conducting sohcxtataons and promotional programs to attract
tourists and conventton delegates or regastrants to the mumc~palaty or its vacmxty as authorized by
TEx T^X CODe § 351 101 (a) Funds for any calendar year which are unused by mldmght December
31st of that year shall be refunded to CITY wathm tbarty (30) days
2.2 Administrative Costs. The hotel tax funds received from the CITY by the ASSOCIATION
may be spent for day-to-day operattons, supplies, salaries, office rental, travel expenses, and other
admamstratave costs that are ancurred d~rectly in the performance by the ASSOCIATION of those
actawt~es specffied m ¶2 1 above and are allowed by TEx Tax CODE §351 101(f)
2.3 Specific Restrictions on Use of Funds
(a) That pomon of total adm~mstrat~ve costs of the ASSOCIATION for winch hotel tax
funds may be used shall not exceed that port~on of the ASSOCIATION's adrmmstmtlve costs
actually recurred m conducting the acttv~t~es specffied in ¶2 1 above
(b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct
an actawty the primary purpose of wluch as not chrectly related to the promolaon of local tourism and
the convention and hotel andustry or the performance of the person's job an an efficient and
professaonal manner
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3 1 Budget
(a) The ASSOCIATION shall prepare and subrmt to the Caty Manager of the CITY an
annual budget (see Extnbat "A") as approved by the Caty Council for each calendar year, for such
operataons of the ASSOCIATION m wluch the hotel tax funds shall be used by the
ASSOCIATION Tins budget shall specffically adentffy proposed expendatures of hotel tax funds
by the ASSOCIATION In other words, the CITY should be able to audit specifically where the
funds in the separate account relating to hotel tax funds wall be expended The CITY shall not pay
to the ASSOCIATION any hotel tax revenues as set forth m Sectton I of th~s contract dunng any
Page 3
fiscal year of tlus Agreement unless a budget for such respective fiscal year has been approved in
writing by the Denton City Council authorizing the expen&ture of funds Fmlure to submit an
annual budget may be considered a breach of contract, and if not remedied is considered grounds for
termmataon of ttns Agreement as stated in 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 ptud
by the CITY to the ASSOCIATION under this Agreement The ASSOCIATION shall expend
hotel tax funds only in the manner and for the purposes specified in th~s Agreement, Tex TAx
CODE §351 101(a) and in the budget as approved by the CITY
3.2 Separate Aecounts. The ASSOCIATION shall malntmn any hotel tax funds paid to the
ASSOCIATION by the CITY in a separate bank account wath segregated accounting, such that any
reasonable person can review the source of expenditures of tax funds A bank reconclhat~on report
(see Exlublt "B") is reqmred wath each quarterly report
3.3 Fmaneml Records. The ASSOCIATION shall mmntam complete and accurate financial
records of each expenditure of the hotel tax funds made by the ASSOCIATION These funds are
reqmrad to be classified as restricted funds for audited financial purposes, and may not be used for
supporting services, including, but not hmated to, auditing fees and attorney's fees Upon
reasonably advance wnttan request of the Denton City Council, the City Manager or designate, or
any other person, shall make such financial records available for inspection and review by the party
mal~ng the request ASSOCIATION understands and accepts that all such financial records, and
any other records relating to th~s Agreement shall be subject to the Public Informataon Act, TEX
GOV'T CODE, ch 552, as hereafter amended
3.4 Quarterly Reports. Within tturty days after the end of every contract quarter,
ASSOCIATION shall furmsh to CITY (1) a performance report of the work performed under flus
Agreement dascnbmg the act~vtues performed pursuant to tbas Agreement dunng that contract
quarter, and (2) a list of the expenditures made wath regard to hotel tax funds pursuant to TEX TAx
CODE §351 101(C) Both the performance and expenditure reports wall be in a form either
determined or approved by the City Manager or designate (see Exhibit "B") The ASSOCIATION
shall respond promptly to any request from the City Manager of the CITY, or designate, for
addltaonal mformat~on relattng to the act~vltaes performed under tlus Agreement
3 5 Notice of Meetings. The ASSOCIATION shall give the City Manager of the CITY
reasonable advance wnttan hOrace of the t~me and place of all meetings of ASSOCIATION's Board
of Directors, as well as any other meeting of any constituency of the ASSOCIATION at wluch tlms
Agreement or any matter the subject oftl~s Agreement shall be considered Tlus provision shall not
be deemed to reqmre the ASSOCIATION to give notme of any executive session of the Executave
Committee of the ASSOCIATION
IV TERM AND TERMINATION
4 1 Term. The term of tlus Agreement shall commence on January 1, 1999 and terminate at
mldmght on December 31, 1999 Ttus term shall be a period of one year
Page 4
4 2 Termination Without Cause.
(a) Ttus Agreement may be terminated by either party, wth or wtthout cause, by giving
the other party sixty (60) days advance written notice
(b) In the event th~s contract ~s termmated by either party pursuant to Sectmn 4 2(a),
the CITY agrees to reimburse the ASSOCIATION for any contractual obhgatlons of the
ASSOCIATION undertaken by the ASSOCIATION in satisfactory performance of those
activities specffied m ¶¶2 1 and 2 2 above and that were approved by the Council through the
budget, as noted m ¶3 1 This reimbursement xs condmoned upon such contractual obhgatxons
hawng been ~ncurred and entered mto in the good faith performance of those services
contemplated m ¶¶2 1 and 2 2 above, and further condmoned upon such contractual obligations
having a term not exceeding the full term of thxs Agreement Notwithstanding any provision
hereof to the contrary, the obhgat~on of the CITY to reimburse the ASSOCIATION or to assume
the performance of any contractual obhgat~ons 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
(c) Further, upon termmat~on pursuant to ¶4 2(a), the ASSOCIATION will provide the
CITY 1) W~thxn 10 bus~ness days from the tenmnatlon nouficatlon, a short-term budget of
probable expenditures for the remmmng 60 day period between termination notfficat~on and
contract termmatxon This budget will be presented to Council for approval within l0 business
days after receipt by CITY If formal approval is not g~ven within 10 business days and the
budget does not contain any expenditures that would be prohibited by the Texas Tax Code, and
is vathm the current contractual period approved budget, the budget v~ll be considered
approved, 2) Within 30 days, a full accounting of all expenditures not previously audited by the
C~ty, 3) Wxthm 5 business days of a request from the CITY, a listing of expenditures that have
occurred since the last reqmred reportmg period, 4) a final accounUng 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 improperly Any use of rematmng funds by the
ASSOCIATION after notfficatlon of termination ~s conditioned upon such contractual
obhgatlons hawng been incurred and entered into In the good froth performance of those services
contemplated ~n 2 1 and 2 2 above, and further conditioned upon such contractual obligations
having a term not exceedmg the full term of th~s Agreement
4 3 Automatic Termmat~on. This Agreement shall automatmally tenmnate upon the
occurrence of any of the following events
(a) The termination of the legal existence of the ASSOCIATION,
(b) The msolvency of the ASSOCIATION, the filing of a pettt~on m bankruptcy, either
voluntarily or involuntarily, or an assignment by the ASSOCIATION for the benefit of
crechtors,
(c) The eontanuatton of a breach of any of the terms or conditions of flus Agreement by
either the CITY or the ASSOCIATION for more than tturty (30) days after written notme of
such breach is g~ven to the breaching party by the other party, or
Page 5
(d) The flulure of the ASSOCIATION to subnut a financial quarterly report whtch complies
w~th the reporting procedures reqmred hereto and generally accepted accounting pnnclples
prior to the begmmng of the next contract term, or quarterly as reqmred by Section 1 3
hereof
4 4 l~ght to Immediate Termmation Upon Litigation. Notw~thstan&ng any other provision
of flus Agreement, to mitigate damages and to preserve evidence and issues for judmlal
determmataon, either party shall have the right to tenmnata flus Agreement upon me&ate
notice to the other party in the event that any person has lnstatutad ht~gat~on concermng thc
acttwtaes of the non-tenmnatmg party, and thc terminating party reasonably believes that
such acttvltles are reqmred or prolub~ted under flus Agreement
4.5 In the event that flus Agreement is temunated pursuant to ¶¶4 3 or 4 4, ASSOCIATION
agrees to refund any and all unused funds, or funds determined by thc CITY to have been used
improperly, w~flun 30 days after termination of flus Agreement
V. GENERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing m flus Agreement shall protublt, nor
be construed to probablt, the agreement by the ASSOCIATION w~th another private entity, IX'rson,
or orgamzalaon for the performance of those services described in ¶2 1 above In the event that the
ASSOCIATION enters into any arrangement, contractual or otherwise, with such other cntaty,
person or orgamzation, the ASSOCIATION shall cause such other entity, person, or orgamzal~ton to
adhere to, conform to, and be subject to all pmwslons, terms, and condmons of flus Agreement and
to TEX TAX CODE ch 351, including reporting reqmrements, separate funds maintenance, and
lllmtatlons and protublt~ons pertarmng to expenditure of the agreed payments and hotel tax funds
5.2 Independent Contractor. The ASSOCIATION shall operate as an independent contractor
as to all serwces to be performed under flus 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 orgamzatlons performing the same
and the ASSOCIATION shall be solely responsible for the acts and ormsslons of its chrectors,
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 Indemnifieafion. The ASSOCIATION agrees to mdemmfy, hold harmless, and defead the
CITY, its officers, agents, and employees fi~om and against any and all claims or suits for mlunes,
damage, loss, or liability of whatever land or character, arising out of or in connection w~th the
performance by the ASSOCIATION or those services contemplated by flus Agreement, including
all such ¢lmms or causes of actaon based upon common, const~tutaonal or statutory law, or bm,ed, m
whole or in part, upon allegations of neghgant or lntenttonal acts of ASSOCIATION, its officers,
employees, agents, subcontractors, licensees and mvltees
5 4 Assignment The ASSOCIATION shall not assign flus Agreement w~thout first obtawang
the written consent of the CITY
Page 6
5 5 Not~ce. Any notice reqmred to be given under th~s Agreement or any statute, ordinance, or
regulataon, shall be effective when g~ven in writing and deposited m the Umted States mml, certified
mall, return receipt requested, or by hand-dehvery, addressed to the respective partxes as follows
CITY fiaS,.S_O_C, J~ .I IO~
City Manager Tejas Storytelling Assocmt~on, Inc
C~ty of Denton Davxd P~erce
215 E McKmney P O Box 2806
Denton, TX 76201 Denton, Texas 76202-2806
5 6 Inurement. Th~s Agreement and each pmws~on hereof, and each and every right, duty,
obhgat~on, and habfl~ty set forth hereto shall be binding upon and mute to the benefit and obhgatmn
of the CITY and the ASSOCIATION and tbe~r respective successors and assigns
5 7 Application of Laws. All terms, cond~ttons, and prows~ons of tlus Agreement are subject
to all apphcable federal laws, state laws, the Charter of the C~ty of Denton, all ordinances passed
pursuant thereto, and all judicial deternunattons relative thereto
5.8 Exclusive Agreement. Ttus Agreement contmns the entire understanchng and constitutes
the enttre a~eement between the parttes hereto concermng the subject matter contained here~n
There are no representations, agreements, arrangements, or understandings, oral or written, express
or ~mphed, between or among the part, es hereto, relating to the subject matter of fins Agreement,
whtch are not fully expressed hereto The terms and conditions of th~s Agreement shall prevml
notunthstand~ng any variance ~n tins Agreement from the terms and con&tmns of any other
document relating to flus transactton or these transactions
5 9 Duplicate Originals. Ttus Agreement is executed ~n duplicate originals
5.10 Headings. The bead~ngs and subheadings of the varmus sectmns and paragraphs of th~s
Agreement are inserted merely for the purpose of convemcnce and do not express or ~mply any
lmutatton, defimtlon, or extension of the specific terms of the sectton and paragraph so designated
5 11 Severabdity. If any sectmn, subsection, paragraph, sentence, clause, phrase or word in flus
Agreement, or apphcatmn thereof to any person or mrcumstance is held ~nval~d by any court of
competent junsdtctton, such holding shall not affect the validity of the remmnmg portions of thts
Agreement, and the partxes hereby declare they would have enacted such remmmng porttons despite
any such mvahd~ty
5.12 Insurance. The ASSOCIATION shall provide insurance as follows
$500,000 Commercial General Lmbfiny
Statutory Workers' Compensation and Employers' Lmbfl~ty
($100,000/$500,000/$100,000)
$500,000 Business Automobile L~abfl~ty on any owned, non-owned or lured
velucles
Page 7
The CITY must be named as an adcht~onal insured on all pohcles (except Workers' CompensaUon)
and proof of coverage shall be submitted prior to any payment by the CITY
EXECUTED tlus ~ day of ~./J~J ,1998
THE CITY OF DENTON, TEXAS
By JACK~
ATTEST APPROVED AS TO LEGAL FO~dM
~-~q~FER~VALTERS, ~.~'Z~HERBERT L PRO/U'T~,
CITY SECRETARY CITY ATT~,Ig~Y
TEJAS S/T'ORYTELLING ASSOCIATION,
Chmrman/D~rector
ATTEST' APPROVED AS TO LEGAL FORM
By By
Secretary
Page 8
Tejas Storytelling Association
PO Bax 2~o~
Denton, TX 76202
Wodnesd~y. O~ober 21, 1998
]mf~ L, Tr~no, Tax Spemahs~
Cl~y oF DenOn
60] E N~ekorySt, Su~eF
~l)~'~. TX '/6201
Ple~e call me ~ ny ques~ons
Britt IG'hovjak, Tejns ~tmyt~mg Ass~c~bm
940 565-5220
10/21/98 19 07 FAX 940 591 7905 BLK ACCOUNTING
Tejas Sto~/te|ling Asso.
HOT Complienoe
Postage 34 ,/
I
Telephone 6,048 ~
Pnnt
~ve~l~ t~1 ~ 8.615
pe~er Fe~ 6,166 ~ 6.166
~ookk~ping ~,t 26~
3,537 /
Paymll 138 ~
SuppheS
S~ Insurance ~0 ~
Tent ~n~ts, etc 4 7~ V 10,218
Total 24,9~ 24,9~
TEJAS STORYTELLING ASSOCIATION
FINANCIAL REPORT
Program Year t999
1ST 2ND 3RD 4TH BUDGET
QUARTER QUARTER QUARTER QUARTER YEAR TO VS
~.~ Jan. Med (Apr-Jun) (Jul-Sep)(Oct. Dec) DATE ACTUAL
$0 $0 $0 $0 $0 $0
~11~ T~ ~ $0 $0 $0 $0 $0 $24,999
~ 0 0 0 0 0 0
II~em~ ,~ $0 $0 $0 $0 $0 $24,999
$'34 $0 $0 $0 $0 $0 $34
~ 0 0 0 0 0 1,092
~ 0 0 0 0 0 6,048
.... ~,44~ 0 0 0 0 0 1,441
Te~ ~ $0 $0 $0 $0 $0 $8,615
Fees ${~!~ $0 $0 $0 $0 $0 $6,166
~eptng $~,12~ $0 $0 $0 $0 $0 $1,126
~,~37 0 0 0 0 0 3,537
~~ 1~ 0 0 0 0 0 138
~ 0 0 0 0 0 660
I~,2~ 0 0 0 0 0 4,757
Tel~t ~, ~ ....... $ $0 S0 $0 $0 $0 $10,218
T~~ ~2~ $0 $0 $0 $0 $0 $24,999
. $o $o $o $o $o $o
$o $o $o $o $o $o
~aal~e~tta~ $o $o $o $o $o $o
tamm~~ o o o o o o
~l~trt~,,ms o o o o o o
Blmki~m~a $o $o $o $o $o $o
$o $o $o $o $o $o
Date Submitted Program Director