1998-425AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON HISPANIC 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
~ That the Mayor is hereby authorized to execute an agreement between the
City of Denton and the Denton Hispanic Chamber of Commerce for the payment and use of hotel
tax revenue, under the terms and condlt~ons contmned in the agreement, a copy of which ~s
attached hereto and made a part hereof
~ That th~s ordinance shall become effective immediately upon its passage
and approval
d yo,
1998
JA~ILLER, MAYOR
ATTEST,
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CIT~Y._ATT~RNEY
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON HISPANIC CHAMBER OF COMMERCE (CY1999)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a mumcipal corporaUon
(the "CITY"), and the Denton Hlspamc Chamber of Commerce, a legal entaty exastmg under the
laws of the State of Texas (the "CHAMBER")
WHEREAS, Tex Tax Code §351 002 authorizes the CITY to levy by ordinance a
murnmpal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the consideration
paid by a hotel occupant, and
WHEREAS, by orrhnance, the CITY has provided for the assessment and collection of a
mtuncapal hotel occupancy tax m the Caty of Denton of seven percent (7%), and
WHEREAS, Tex Tax Code §351 101(a) authorizes the CITY to use revenue from 1ts
mummpal hotel occupancy tax to promote tounsm and the convention and hotel industry by
advertmlng and conducting sohmtat~ons and promotional programs to attract tounsts and convention
delegates or regastrants to the mumclpahty or its mmmty, and
WHEREAS, the CHAMBER as well eqmpped to perfonu those actawt~es, and
WHEREAS, Tex Tax Code §351 101(c) authorizes the CITY to delegate by contract wath
the CHAMBER, as an independent entaty, the management and supervision of programs and
actawtles of the type described heremabove funded w~th revenue from the murnc~pal hotel
occupancy tax,
NOW, THEREFORE, m consideration of the performance of the mutual covenants and
promases contained herein, the CITY and the CHAMBER agree and contract as follows
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and m consaderatton of the actlvat~es to be performed by the
CHAMBER under thts Agreement, the CITY agrees to pay to the CHAMBER a pomon of the hotel
tax revenue collected by the CITY at the rates and m the manner specified heretn (such payments by
the CITY to the CHAMBER sometimes here~n referred to as the "agreed payments" or "hotel tax
funds")
1.2 Amount of Payments.
(a) As used m ttus Agreement, the following terms shall have the following specific
meanings
(0 The term "hotel tax revenue" shall mean the gross momes collected and
received by the City as mumelpal hotel occupancy tax at the rate of seven percent (7%) of
the price prod for a room ~n a hotel, pursuant to Texas Tax Code 351 002 and Caty
Ordinance Hotel tax revenue will include penalty and interest related to the late
payments of the tax revenue by the taxpayer
(I0 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
collected through the 22nd day of the month following the close of the relevant fiscal year
(II0 The term "base payment mount" shall mean a net amount of money equal
to the total hotel tax revenue collected by the CITY during any relevant period of tune (t e,
fiscal year or fiscal quarter), less (1) attorney and auditing costs incurred during such
relevant penod of tune for costs of collection or Inditing of hotel taxpayers Attorney and
auditing costs include fees paid to attorneys or agents not In 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 in lmgat~on against or auchtmg of such
taxpayers
(iv) The term "contract quarter" shall refer to any quarter of the calendar year m
which tins A~greement is in force Contract quarters will end on March 31st, June 30th,
September 30m, and December 31st of each contract year
(b) In return for satisfactory performance of the activities set forth in this Agreement
and all attachments hereto, the CITY shall pay to CHAMBER an amount of money in each
contract year equal to the fixed enntract amount of Five Thousand Dollars ($5,000) Tins
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 required quarterly reports
1.3 Dates of Payments.
(a) The term "payments" shall mean payments by the CITY to the CHAMBER of those
amounts specffied in ¶1 2, above, as determined by the hotel tax revenue collected
(b) In return for the satisfactory performance of the activlt~es set forth In tins contract and
all attachments thereto, CITY shall pay the CHAMBER the agreed payments specified m ¶l 2
above by no more than two payments, paying the fixed contract amount dunng the 1st and 2nd
quarter of the calendar year Ifa second payment IS due, that payment shall be prod upon receipt
of the required reports and after the 25Ch day following the last day of the contract quarter If
quarterly finanmal and performance reports are not received witlun thmy (30) days of the end of the
applicable quarter, the recipient may be held m breach of tins Agreement The CITY may withhold
the quarterly payment(s) unttl the appropriate reports are received and approved, wtuch approval
shall not unreasonably be withheld
1.4 Other limitations regarding consideration
(a) The funding of this project m no way comnuts the CITY to future funchng of flus
program beyond the current contract period Any future funding IS solely the responsIbIhty of the
CHAMBER
Page 2
(b) It ~s expressly understood that flus contract m no way obhgates the General Fund or any
other momes or credtts of the CITY
(c) CITY may w~thhold further allocations if CITY detenmnes that CHAMBER's
expenditures deviate materially from their approved budget
II. USE OF HOTEL TAX REVENUE
2 1 Use of Funds. For and ~n consideration 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 adve~smg and conducting sohcitatmns and promotional programs to attract tourists
and convention delegates or registrants to the mumcipallty or its vicinity as authonzed by TEx TAX
Coon §351 101(a) Funds for any calendar year wluch are unused by mldmght December 31't of
that year shall be refunded to CITY w~thm flurty (30) days
2.2 Administrative Costs. The hotel tax funds received from the CITY by the CHAMBER may
be spent for day-to-day operattons, supplies, salaries, office rental, travel expenses, and other
admlmstrative costs that are recurred &rectly m the performance by the CHAMBER of those
activities specified m ¶2 1 above and are allowed by Tax TAX Coon §351 101(f)
2.3 Specific Restrictions on Use of Funds.
(a) That portion of total admlmstrative costs of the CHAMBER for wluch hotel tax
funds may be used shall not exceed that po~on of the CHAMBER's adrmmstrat~ve costs actually
recurred m conducting the act~wties specified m ¶2 1 above
Co) Hotel tax funds may not be spent for travel for a person to attend an event or conduct
an actixaty the primary purpose ofwluch is not rhrectly related to the promotion of local tourism and
the conventton and hotel industry or the performance of the person's job m an efficient and
professloml manner
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
(a) The CHAMBER shall prepare and submit to the City Manager of the CITY an annual
budget (see Exinb~t "A") as approved by the City Council for each calendar year, for such
operatmns of the CHAMBER tn wluch the hotel tax funds shall be used by the CHAMBER Ttus
budget shall specifically identify proposed expenditures of hotel tax funds by the CHAMBER In
other words, the CITY should be able to audit specffically where the funds m 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 ~n Sectmn 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
authorizing the expenditure of funds Fmlure to subnut an annual budget may be considered a
breach of contract, and if not remedied is considered grounds for tcnmnat~on of flus Agreement as
stated m paragraph 4 2
Page 3
(b) The CHAMBER acknowledges that the approval of such budget by the Denton City
Council creates a fidumary duty ~n the CHAMBER with respect to the hotel tax funds prod 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 m flus Agreement, TEX TAX CODe §351 101(a) and m
the budget as approved by the CITY
3 2 Separate Accounts. The CHAMBER shall mamtam 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 review the source of expenchtures of tax funds A bank reconclhatton report
(see Extublt "B") is reqmred wath each quarterly report
3 3 FinanelalRecords. The CHAMBER shall mamtmn complete and accurate financml
records of each expenditure of the hotel tax funds made by the CHAMBER These funds are
required to be clasmfied as restricted funds for audated financml purposes, 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 avmlable for inspection and review by the party
malong the request CHAMBER understands and accepts that all such financial records, and any
other records relating to flus Agreement shall be subject to the Public Information Act, TEX GOV'T
CODE, ch 552, as hereat~er amended
3.4 Quarterly Reports. ARer unttal receipt of hotel tax funds, and wit!un thirty days after the
end of every quarter thereafter, until all funds have been expended and reported to the CITY,
CHAMBER shall funush to CITY (1) a performance report of the work performed under t!us
Agreement describing the activities performed pursuant to flus Agreement dunng that contract
quarter, and (2) a hst of the expenchtures 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
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
~nformat~on relating to the actlv~tles performed under this Agreement
3 5 Not~ee of Meetings. The CHAMBER shall give the City Manager of the CITY reasonable
advance written nottce of the ttme and place of all meetings of CHAMBER's Board of Directors, as
well as any other meeting of any constituency of the CHAMBER at which flus Agreement or any
matter the subject of th~s Agreement shall be considered Ttus provision shall not be deemed to
reqmre the CHAMBER to g~ve notme of any executive session of the Executive Committee of the
CHAMBER
IV TERM ~ TERMINATION
4.1 Term The term of this Agreement shall commence on January 1, 1999 and terminate at
mldmght on December 31, 1999 Thts term shall be a period of one year
4 2 Termination Without Cause.
(a) Tlus Agreement may be terminated by e~ther party, w~th or without cause, by glvtng
the other party sixty (60) days advance written notice
Page 4
(b) In the event this contract is terminated by either party pursuant to Section 4 2(a),
the CITY agrees to reimburse the CHAMBER for any contractual obligations of the CHAMBER
undertaken by the CHAMBER in satisfactory performance of those actlvmes specified m ¶¶2 1
and 2 2 above and that were approved by the Council through the budget, as noted in ¶3 1 This
reimbursement is conditioned upon such contractual obligations having been incurred and
entered rolo m the good faith performance of those services contemplated in ¶¶2 1 and 2 2 above,
and further conchtloned upon such contractual obhgatlOnS hawng a term not exceeding the full
term of this Agreement Notwithstanding any provision hereof to the contrary, the obhgatlon of
the CITY to reimburse the CHAMBER or to assume the performance of any contractual
obligations of the CHAMBER for or under any contract entered into by the CHAMBER. as
contemplated herein 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) Wltlun 10 business days from the tenmnat~on notfficatlon, a short-term budget of
probable expemhtures for the remmmng (SO day period between termination notfficatlon and
contract termmatlon This budget will be presented to Council for approval w~thln 10 business
days after receipt by CITY If formal approval is not given within 10 bus~ness days and the
budget does not contain any expen/htures that would be proinblted by the Texas Tax Code, and
is within the current contractual penod approved budget, the budget will be considered
approved, 2) Wltinn 30 days, a full accounting of all expenditures not previously audited by the
City, 3) Wlthm $ business days of a request from the CITY, a hstmg of expenditures that have
occurred since the last required reporting period, 4) a final accounting of all expenditures and tax
funds on the day of termination The CHAMBER wall be obligated to return any unused funds or
fi~ds determined to be used improperly Any use of remalmng funds by the CHAMBER after
notification of termination is conthtloned upon such contractual obligations having been recurred
and entered into in the good faith performance of those services contemplated in 2 1 and 2 2
above, and further contht~oned upon such contractual obligations having a term not exceeding
the full term of this Agreement
4.3 Automatic Termination. Tfus Agreement shall automatmally tenmnate upon the
occurrence of any of the following events
(a) The temunataon of the legal existence of the CHAMBER,
(b) The insolvency of the CHAMBER, the fihng of a petitmn m bankruptcy, e~ther
volunta~ly or involuntarily, or an assignment by the CHAMBER for the benefit of ered~ters,
(c) The contmuatmn of a breach of any of the terms or conthtaons of tbas Agreement by
either the CITY or the CHAM~ER for more than thaW (30) days after written notme of
such breach is g~ven to the breacbang party by the other party, or
(d) The fmlure of the CHAMBER to submit a finanmal quarterly report wbaeh eomphes
with the reporting procedures required here~n and generally accepted accounting principles
prior to the begmmng of the next contract term, or quarterly as reqmred by Section 1 3
hereof
P~e5
4.4 Right to Immediate Termination Upon Litigation. Notw~thstanchng any other pmws~on
of fi'ns Agreement, to tint,gate damages and to preserve exadence and tssues for jud~ctal
determination, either party shall have the right to terrmnate flus Agreement upon immediate
notme to the other party m the event that any person has lnstttuted ht~gat~on concerning the
acttmtles of the non-terminating party, and the termmatmg party reasonably beheves that
such aetavtt~es are reqmred or pmbabtted under flus Agreement
4 5 In the event that flus Agreement ts 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
tmproperly, wtflun 30 days after ternunatton offals Agreement
V. GENERAL PROVISIONS
5 1 Subcontract for Performance of Servtces. Nothing tn thts Agreement shall protubtt, nor
be construed to prolublt, the agreement by the CHAMBER wtth another private entaty, person, or
orgamzatmn for the performance of those services described m ¶2 1 above In the event that the
CHAMBER enters rote any arrangement, contractual or otherwise, w~th such other entity, person or
orgemzatmn, the CHAMBER shall cause such other entity, person, or orgamzatmn to adhere to,
conform to, and be subject to all prowstons, terms, and con&tmns of flus Agreement and to TEx
TAX Cove ch 351, mcludmg reporting reqmrements, separate funds maintenance, and hnutattons
and prolubttmns pertanung to expenditure of the agreed payments and hotel tax funds
5.2 Independent Contractor. The CHAMBER shall operate as an independent contractor as
to all serrates to be performed under flus Agreement and not as an officer, agent, servant, or
employee of the CITY The CHAMBER shall have exclusive con~'ol of its operations end
performance of services hereunder, and such persons, ent~t~es, or orgamzatmns performing the same
end the CHAMBER shall be solely responstble for the acts and onusstons of its dtreetors, officers,
employees, agents, and subcontractors The CHAMBER shall not be constdered a partner or jomt
venturer w~th the CITY, nor shall the CHAMBER be constdered nor m any manner hold ~tself out
as an agent or official representattve of the CITY
5.3 Indemnification. The CHAMBER agrees to mdemmfy, hold harmless, and defend the
CITY, tts officers, agents, and employees from and against any and all clanns or stats for injuries,
damage, loss, or hab~hty of whatever kind or character, ansmg out of or an couneCtlon with the
performance by the CHAMBER or those serwces contemplated by flus Agreement, tncludmg all
such clmms or causes of action based upon common, constitutional or statutory law, or based, tn
whole or m part, upon allegations of neghgent or mtentmnal acts of CHAMBER, tts officers,
employees, agents, subcontractors, hcensees and mvaees
5 4 Assignment. The CHAMBER shall not assign flus Agreement wahout first obtmmg the
wntten consent of the CITY
5.5 Notice. Any not~ee reqmred to be g~ven under tlus Agreement or any statute, ordinance, or
regulatton, shall be effective when g~ven tn wntlng and deposaed m the Umted States mml, cemfied
mml, return receipt requested, or by hand-delivery, addressed to the respecttve parttes as follows
Page 6
CITY CHAMBER
City Manager Denton Hlspamc Chamber of Commerce
C~ty of Denton Tomasa Garcla
215 E MeKtnney P O Box 425976
Denton, TX 76201 Denton, Texas 76202
5 6 Inurement. Tlus Agreement and each pmws~on hereof, and each and every right, duty,
obligation, and hab~hty set forth hereto shall be binding upon and mnre to the benefit and obhgat~on
of the CITY and the CHAMBER and their respective successors and assigns
5 7 Applleaaon of Laws. All terms, condltmns, and prowsmns of flus Agreement are subject
to all apphcable federal laws, state laws, the Charter of the C~ty of Denton, all orchnances passed
pursuant thereto, and all judmlal determmatmns relative thereto
5 8 Exclusive Agreement. Tlus Agreement contains the entire understanchng and constitutes
the entire agreement between the parttes hereto concermng the subject matter enntamed herem
There are no representattons, agreements, arrangements, or understanchngs, oral or written, express
or ~mphed, between or among the part,es hereto, relating to the subJeCt matter of tins Agreement,
wtuch are not fully expressed hereto The terms and condmons of flus Agreement shall prevml
notwithstanding any variance m flus Agreement from the terms and condmons of any other
document relating to flus transaction or these transactions
5 9 Duplicate Originals Tlus Agreement ~s executed m dupbcate ongmals
5.10 Headings. The heachngs and subheadangs of the various sections and paragraphs of thrs
Agreement are inserted merely for the purpose of convemence and do not express or imply any
hnutatmn, deftmtmn, or extension of the specffic terms of the sectmn and paragraph so designated
5 11 Severabllity. If any section, subsectmn, paragraph, sentence, clause, phrase or word m flus
Agreement, or apphcat~on thereof to any person or ctrcumstance is held mvahd by any court of
competent junsd~ctton, such holding shall not affect the vahthty of the remaining portions of flus
Agreement, and the parttes hereby declare they would have enacted such rematmng port~ons despite
any such mval~dtty
THE CITY OF DENTON, TEXAS
By
JACK ~J~fER~ MAYOR
ATTEST APPROVED AS TO LEGAL FORM
P~e7
:klERBERT L PROUTY,
JEI~FER'W~.~TE~S'~CiTY SECRETARY c- CITY ATTORNEY~///
DENTON HISP,gd~IIC CH~BER OF
COMMERCE ,
~~rector ~
ATTEST ~PROVED AS TO LEGAL FO~
Secre~' g
Page 8
Tomasa L. Garcla, M Ed. 9403801776 10/23/1998 10.04.43 AM P 2
HISPANIC CHAMBER OF COMMERCE
FINANCIAL REPORT
Program Year 1999
................... 1ST 2ND 3RD 4TH BUDGET
QUARTER QUARTER QUARTER QUARTER YEAR TO VS
(Jan-Mar) (Apr-Jun) (JuI. Sep) (Oct. Dec) DATE ACTUAL
$o $o $o $o $o $o
~ $o $o $o $o $o $5,000
e o o o o o o
'""~ $o $o $o $o $o $5,ooo
$I.SOo $o $o $o $o $o $1,5oo
~ o o o o o 1,ooo
' ~ $0 $0 $0 $0 $0 $2,500
~_~so~ $0 $0 $0 $0 $0 $2,500
Ss~aoe $0 $0 $0 $0 $0 $5,000
$o $o $o $o $o $o
$o $o $o $o $o $o
~ m~ ~ $o $o $o $o $o $o
lam~~~ o o o o o o
o o o o o o
~l~e $o $o $o $o $o $o
Vafl~,~e~) $o $o $o $o $o $o
Date Submitted Program D~rector