Loading...
1998-427AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE SCHOLARS PHAIR FOUNDATION, INC 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 anthonzed to execute an agreement between the City of Donton and the Scholars Phmr Foundation, Inc for the payment and use of hotel tax revenue, under the terms and eonchtlons contained in the agreement, a copy of which ~s attached hereto and made a part hereof ~ That this ordinance shall become effective immediately upon its passage and approval 1998 JA~ei~LLER, MAYOR ATTEST JENNIFI~R WALTERS, CITY SECRETARY AGREEMENT BETWEEN THE CITY OF DENTON AND SCHOLARS PHAIR FOUNDATION, INC (CY1999) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEMENT made between the City of Denton, Texas, a mumclpal corporation (the "CITY"), and Scholars Phaxr Foundation, Ine, a legal entity existing under the laws of the State of Texas (the "FOUNDATION") 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 consideration paid by a hotel occupant, and WHEREAS, by ordinance, the CITY has pmwded 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 municipal hotel occupancy tax to promote tourism and the convention and hotel mdustry by advertising and conducting soheltataons and pmmotaonal programs to attract tourists and convention delegates or registrants to the mumclpahty or its vlematy, and WHEREAS, the FOUNDATION is well eqrupped to perform those activities, and WHEREAS, Tex Tax Code §351 101(c) authorizes the CITY to delegate by contract w~th the FOUNDATION, as an mdependent entity, the management and supervision of programs and activities of the type desunbed heremabove funded with revenue from the mumclpal hotel occupancy tax, NOW, THEREFORE, m consideration of the performance of the mutual covenants and promises contained herem, the CITY and the FOUNDATION agree and contract as follows I. HOTEL TAX REVENUE PAYMENT I I Consideration. For and m consideration of the aet~vmes to be performed by the FOUNDATION under fins Agreement, the CITY agrees to pay to the FOUNDATION a portion of the hotel tax revenue collected by the CITY at the rates and in the manner specified herein (such payments by the CITY to the FOUNDATION sometunes herem referred to as the "agreed payments" or "hotel tax funds") 1.2 Amount of Payments. (a) As used m fins Agreement, the following terms shall have the followmg specific meamngs (0 The term "hotel tax revenue" shall mean the gross momes collected and received by the City as municipal 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 City Ordinance Hotel tax revenue will include penalty and interest related to the late payments of the tax revenue by the taxpayer 0O The term "Collection period" will mean the collection period for the CITY's fiscal year It will mclude hotel tax revenue due to the Cxty for the relevant fiscal year and collected through the 22nd day of the month following the close of the relevant fiscal year 0n) 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 tune (t e, fiscal year or fiscal quarter), less (1) attorney and auchtmg costs recurred during such relevant period of ttme for costs of eollectaon or auditing of hotel taxpayers Attomey and auditing costs include fees prod to attorneys or agents not m the regular employ of the CITY for winch attorneys or agents effect comphanee or collection of the hotel tax from taxpayers, and (2) court costs and other expenses recurred m htlgatxon against or auchtmg of such taxpayers 0v) The term "contract quarter" shall refer to any quarter of the calendar year m winch tins Agreement ~s m force Contract quarters will end on March 31st, June 30th, September 30~, and December 31st of each contract year (b) In return for satisfactory performance of the aet~wtxes set forth m tins Agreement and all attachments hereto, the CITY shall pay to FOUNDATION an amount of money ~n each contract year equal to the fixed contract amount of Ten Thousand Dollars ($10,000) Th~s amount will be divided xnto no more than two payments Each 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. (a) The term "payments" shall mean payments by the CITY to the FOUNDATION of those amounts specified m ¶1 2, above, as determined by the hotel tax revenue collected (b) In return for the satisfactory performance of the act~vmes set forth m tins contract and all attachments thereto, CITY shall pay the FOUNDATION the agreed payments specified m ¶1 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 ~s due, that payment shall be pa~d upon receipt of the reqmred reports and after the 25tl~ day following the last day of the contract quarter If quarterly financxal and performance reports are not received w~tinn tinrty (30) days of the end of the apphcable quarter, the recxp~ent may be held m breach of tins Agreement The CITY may wxthhold the quarterly payment(s) unttl the appropriate reports are received and approved, winch approval shall not unreasonably be vothheld 1 4 Other limitations regarding consideration. (a) The funding of tins project m no way comnuts the CITY to future funding of tins program beyond the cmTent contract period Any future funding xs solely the respons~bthty of the FOUNDATION Page 2 (b) It is expressly understood that tins contract m no way obhgates the General Fund or any other momes or credits of the CITY (c) CITY may withhold further allocations if CITY detenmnes that FOUNDATION's expenditures deviate materially from their approved budget II. USE OF HOTEL TAX REVENUE 2.1 Use of Funds. For and m conslderalaon of the payment by the CITY to the FOUNDATION of the agreed payments of hotel tax funds specified above, the FOUNDATION agrees to use such hotel tax funds only for adverttsmg and conducting sohmtat~ons and promotional programs to attract tourists and convention delegates or registrants to the mumclpahty or 1ts v~cunty as authorized by TEX TAx CODe §351 101(a) Funds for any calendar year which are unused by nudmght December 31st of that year shall be refunded to CITY wainn tinrty (30) days 2 2 Administrative Costs. The hotel tax funds received from the CITY by the FOUNDATION may be spent for day-to-day operations, supphes, salaries, office rental, travel expenses, and other admunstrative costs that are incurred dtrectly in the performance by the FOUNDATION of those activities specffied m ¶2 1 above and are allowed by TEx TAX CODE §351 101(f) 2.3 Speeffie Restrictions on Use of Funds. (a) That port,on of total admmastrative costs of the FOUNDATION for winch hotel tax funds may be used shall not exceed that portion of the FOUNDATION's admmastraUve costs actually recurred m conducting the act~xataes specified in ¶2 1 above (b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct an activity the primary purpose of winch is not chrectly 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 III RECORDKEEPING AND REPORTING REQUIREMENTS 3.1 Budget. (a) The FOUNDATION shall prepare and subrmt to the Cl~y Manager of the CITY an annual budget (see Exbaint "A") as approved by the City Council for each calendar year, for such operations of the FOUNDATION m winch the hotel tax funds shall be used by the FOUNDATION Tins budget shall specifically denttfy proposed expenditures of hotel tax funds by the FOUNDATION In other words, the CITY should be able to audit specifically where the funds in the separate account relatmg to hotel tax funds will be expended The CITY shall not pay to the FOUNDATION any hotel tax revenues as set forth in Section I of this contract dunng any fiscal year of tins Agreement unless a budget for such respective fiscal year has been approved in 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 reme&ed is considered grounds for termination of tins Agreement as stated tn paragraph 4 2 Page 3 (b) The FOUNDATION acknowledges that the approval of such budget by the Denton C~ty Council creates a fiduciary duty m the FOUNDATION w~th respect to the hotel tax funds prod by the CITY to the FOUNDATION under this Agreement The FOUNDATION shall expend hotel tax funds only in the manner and for the purposes specified ~n tins Agreement, TEx T^x Cove §351 101(a) and m the budget as approved by the CITY 3 2 Separate Accounts The FOUNDATION shall mmntaln any hotel tax funds prod to the FOUNDATION by the CITY m a separate bank account w~th segregated accounting, such that any reasonable person can review the source of expenthtures of tax funds A bank reconcflmt~on report (see Exhibit "B") ~s reqmred vath each quarterly report 3.3 Financial Records. The FOUNDATION shall mmntaln complete and accurate financial records of each expenditure of the hotel tax funds made by the FOUNDATION These funds are reqmred to be classffied as restricted funds for and~ted financial purposes, and may not be used for suppo~ng serwces, mcludang, but not hrmted 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 rewew by the party making the request FOUNDATION understands and accepts that all such financial records, and any other records relating to this Agreement shall be subJeCt to the Public Information Act, T~x Gov'? CovE, ch 552, as hereafter emended 3.4 Qnarterly Reports. At, er ~mttal receipt of hotel tax funds, and wltlmn tinrty days after the end of every quarter thereafter, until all funds have been expended and reported to the CITY, FOUNDATION shall furmsh to CITY (1) a performance report of the work performed under tins Agreement describing the act~wt~es performed pursuant to tins Agreement dunng that contract quarter, and (2) a hst of the expenditures made w~th regard to hotel tax funds pursuant to T~x T^x COOE §351 101(c) Both the performance and expendature reports will be m a form either determined or approved by the C~ty Manager or des~gnste (see Exlmint "B") The FOUNDATION shall respond promptly to any request from the C~ty Manager of the CITY, or designate, for additional mformat~on relating to the acmat~es performed under this Agreement 3.5 NotleeofMeetings. The FOUNDATION shall g~ve the C~ty Manager of the CITY reasonable advance written nottce of the tune and place of all meetings of FOUNDATION's Board of D~rectors, as well as any other meeting of any constituency of the FOUNDATION at winch tins Agreement or any matter the subj eot of tins Agreement shall be considered Tins pmwslon shall not be deemed to reqmre the FOUNDATION to give notme of any executive session of the Executive Committee of the FOUNDATION IV. TERM AND TERMINATION 4.1 Term. The term of tins Agreement shall commence on January 1, 1999 and terminate at nudmght on December 31, 1999 Tins term shall be a period of one year 4 2 Termination Without Cause. (a) Tlus Agreement may be terminated by either party, with or without cause, by g~wng the other party s~xty (60) days advance written nottce Page 4 (b) In the event th~s contract ~s termmated by either party pursuant to Sectxon 4 2(a), the CITY agrees to reimburse the FOUNDATION for any contractual obhgatlons of the FOUNDATION undertaken by the FOUNDATION m satisfactory performance of those act~wtles speeffied m ¶¶2 1 and 2 2 above and that were approved by the Council through the budget, as noted m ¶3 1 This reimbursement is conditioned upon such contractual obhgatlons having been meurred and entered into xn the good froth performance of those servaces contemplated m ¶¶2 1 and 2 2 above, and further condmoned upon such contractual obhgations having a term not exceeding the full term of th~s Agreement Notwithstanding any prowsaon hereof to the contrary, the obhgatmn of the CITY to reimburse the FOUNDATION or to assume the performance of any contractual obhgatmns of the FOUNDATION for or under any contract entered into by the FOUNDATION as contemplated here~n shall not exceed 66 2/3% of the current quarterly payment (e) Further, upon termmat~on pursuant to ¶4 2(a), the FOUNDATION wall provide the CITY 1) W~thm 10 busmess days from the termmatlon notification, a short-term budget of probable expenchtures for the remtunmg 60 day period between termination notlficat~on and contract termination Tins budget will be presented to Council for approval wxthin 10 business days aller receipt by CITY If formal approval is not given within 10 business days and the budget does not contmn any expenchturas that would be prohxblted by the Texas Tax Code, and is waban the current contractual period approved budget, the budget will be considered approved, 2) W~thm 30 days, a full accounting of all expenditures not prevxously and~ted by the Cxty, 3) Wxtinn 5 business days of a request from the CITY, a hsting of expendatures that have occurred since the last required reporting period, 4) a final accounting of all expenditures and tax funds on the day of termmatmn The FOLrNDATION will be obligated to return any unused funds or funds detormmed to be used improperly Any use of remmmng funds by the FOUNDATION after not~fieatxon of termxnatxon is condmoned upon such contractual obllgataons having been mcurred and entered into in the good faith performance of those services contemplated m 2 1 and 2 2 above, and further condmoned upon such contractual obhgat~ons hawng a term not exceedmg the full term of this Agreement 4.3 Automatic Termination. Tins Agreement shall automatacally tenmnate upon the occurrence of any of the following events (a) The tenmnatmn of the legal existence of the FOUNDATION, (b) The msolvency of the FOUNDATION, the filmg of a petition m bankruptcy, e~ther voluntarily or involuntarily, or an assignment by the FOUNDATION for the benefit of creditors, (c) The continuation of a breach of any of the terms or conditions of this Agreement by e~ther the CITY or the FOUNDATION for more than tturty (30) days after written not,ce of such breach is given to the breaching party by the other party, or (d) The fmlure of the FOUNDATION to submit a financial quarterly report wtuch complies w~th the reportmg procedures required herein and generally accepted aceountang pnnclples Page 5 prior to the begmmng of the next contract term, or quarterly as required by Section 1 3 hereof 4.4 Right to Immediate Termination Upon Litigation Notw:thstandmg any other prov:s~on of flus Agreement, to rmtagate damages and to preserve exqdence and ~ssues for judicial determmatmn, eather party shall have the right to terminate flus Agreement upon mmaechate notice to the other party in the event that any person has anstituted ht~gation concerning the aetiwt~es of the non-terminating party, and the terminating party reasonably beheves that such acUv~taes are reqmred or pmtubated under flus Agreement 4.5 In the event that flus Agreement as terminated pursuant to ¶¶4 3 or 4 4, FOUNDATION agrees to refund any and all unused funds, or funds determined by the CITY to have been used ~mproperly, w~tlun 30 days after termination of flus Agreement V. GENERAL PROVISIONS $.1 Subcontract for Performance of Services. Noflung m this Agreement shall probabat, nor be construed to prolubtt, the agreement by the FOUNDATION w~th another private entity, person, or organazataon for the performance of those servaces described ~n ¶2 1 above In the event that the FOUNDATION enters into any arrangement, contractual or otherwise, wath such other entity, person or orgamzation, the FOUNDATION shall cause such other entity, person, or orgamzat~on to adhere to, conform to, and be subject to all prowsaons, terms, and condlt~ons of flus Agreement and to TEx T^x Coos ch 351, mcludmg reporUng reqmrements, separate funds maintenance, and hmltations and protubations pertaining to expendature of the agreed payments and hotel tax funds 5.2 Independent Contractor. The FOUNDATION shall operate as an mdependent contractor as to all servaees to be performed under flus Agreement and not as an officer, agent, servant, or employee of the CITY The FOUNDATION shall have exclusave control of its operations and performance of serwces hereunder, and such persons, entitleS, or orgamzatlons performmg the same and the FOUNDATION shall be solely responsable for the acts and onussaons of ~ts d~rectors, officers, employees, agents, and subcontractors The FOUNDATION shall not be consadered a partner or jomt venturer wath the CITY, nor shall the FOUNDATION be considered nor m any manner hold atself out as an agent or officaal representative of the CITY 5 3 Indemnification. The FOUNDATION agrees to lndemmfy, hold harmless, and defend the CITY, ars officers, agents, and employees from and against any and all claims or suits for mjunes, damage, loss, or habthty of whatever kind or character, arising out of or in connection w~th the performance by the FOUNDATION or those services contemplated by flus Agreement, mcludmg all such claims or causes of acUon based upon common, constituUonal or statutory law, or based, an whole or m part, upon allegataons of neghgent or ~ntent~onal acts of FOUNDATION, ats officers, employees, agents, subcontractors, hcensees and mwtees 5.4 Assignment. The FOUNDATION shall not assign flus Agreement w~thout first obtaimng the written consent of the CITY P~e6 5.5 Notice. Any notice reqmred to be g~ven under tbas Agreement or any statute, orchnance, or regulation, shall be effectave when g~ven m writing and deposited m the Umted States mail, cemfied mall, remm receipt requested, or by hand-dehvery, addressed to the respecttve partxes as follows CITY ~ City Manager Scholars Phalr Foundation of Texas City of Denton Donald Cox 215 E McKumey 210 S Elm St Denton, TX 76201 State A Denton, Texas 76201 5.6 Inurement. This Agreement and each pmwsxon hereof, and each and every right, duty, obligation, and liability set forth hereto shall be binding upon and inure to the benefit and obhgat~on of the CITY and the FOUNDATION and their respecUve successors and assigns 5.7 Application of Laws. All terms, condxt~ons, and prowsions of flus Agreement are subJeCt to all apphcable federal laws, state laws, the Charter of the City of Denton, all ordanances passed pursuant thereto, and all judicial deterrmnat~ons relative thereto 5.8 Exclusive Agreement. Tlus Agreement contains the entire understanding and consUmtes the entire agreement between the parttes hereto concermng the subject matter contained hereto There are no representations, agreements, arrangements, or understandings, oral or written, express or xmphed, between or among the parttes hereto, relatxng to the subject matter of flus Agreement, which are not fully expressed hereto The terms and cond~tlons of this Agreement shall prevail notwithstanding any variance m flus Agreement from the terms and conditions of any other document relaUng to tins transactton or these transacUons 5.9 Duplicate Originals. Tins Agreement ~s executed m duplicate originals 5.10 Headings. The headings and subheadings of the various seCtions and paragraphs of this Agreement are inserted merely for the purpose of convemence and do not express or imply any hnutatlon, defimt~on, or extension of the specific terms of the seCUon and paragraph so designated 5.11 Severabflity. If any section, subseCtion, paragraph, sentence, clause, phrase or word in this Agreement, or apphcataon thereof to any person or circumstance is held xnvalxd by any court of competent junschciaon, such holding shall not affect the vahdaty of the remaimng portions of tins Agreement, and the parties hereby declare they would have enacted such remalmng pomons despite any such mvallrhty EXECUTED tlus _~ day of ~,~ ,1998 JAC~J~ER, MAYOR Page 7 ATTEST APPROVED AS TO LEGAL F. ORM · Jt~i~i iO~ER ~VALTERS, - '~ I:~XJUTY, CITY SEC~T~Y ~Y AXIOMS_ P. O OAT ON, C~rec~ ATTEST APPROVED AS TO LEGAL FO~ By By Secretary Page 8 Scholar Phair HOT Compliance FY' 98.99 Advertisino_ Direct Mail/Postg 1,875 Pubhcahons 4,000 Print 1,250 7,125 Build~ngs Historical Conv/Xpos/Promo 2,875 2,875 Travel Total lO, O00 10,000 SCHOLARS PHAIR FOUNDATION FINANCIAL REPORTS Program Year 1999 t$T 2ND 3RD 4TH BUDGET QUARTER QUARTER QUARTER QUARTER YEAR TO VS (Jan.Mar) (Apr-Jun) (Jul-Sap) (Oct-Dec) DATE ACTUAL $o $o $o $o $o $o $0 $0 $0 $0 $0 $10,000 o o o o o o $0 $0 $0 $0 $0 $10,000 $0 $0 $0 $0 $0 $1 875 0 0 0 0 0 4,000 0 0 0 0 0 1,250 $0 $0 $0 $0 $0 $7,125 $0 $0 $0 $0 $0 $2,875 $o $o $o $o $o $1o,ooo $o $o $o $o $o $o $o $o $o $o $o $o ~;~a~ e~ $o $o $o $o $o $o I~mm ~t~melmll ~ o o o o o o Ott~,~ o o o o o o ~~ $o $o $o $o $o $o $o $o $o $o $o $o Date Submitted Program Director