1998-429AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON COUNTY HISTORICAL
FOUNDATION, INC FOR THE USE OF EXISTING HOTEL TAX REVENUE, AND
PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
.~_Fa.0..~..Q]~ That the Mayor is hereby authorized to execute an agreement between the
City of Denton and the Denton County Historical Foundation, Inc for the use of existing hotel
tax revenue, under the terms and conditions contained in the agreement, a copy of which is
attached hereto and made a part hereof
~ That this ordinance shall become effective immediately upon its passage
and approval
PASSEDANDAPPROVEDtlusthe ~'~ dayof ~-~~ ,
1998
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON COUNTY HISTORICAL FOUNDATION, INC. (CY1999-2001)
PROVIDING FOR THE USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a mumc~pal corporation
(the "CITY"), and the Denton County Historical Foundation, Inc, a corporation ex~stmg under the
laws of the State of Texas (the "FOUNDATION")
WHEREAS, Tex Tax Code §351 002 authorizes the CITY to levy by or&nance a
mumclpal hotel occupancy tax ("hotel tax"), based upon a percentage of the consideration prod by
hotel occupants, and
WHEREAS, by orchnance, the CITY has prowded for the assessment and collection of a
municipal hotel occupancy tax m the C~ty of Denton for the past several years, and
WHEREAS, Tex Tax Code §351 101(a) authorizes the CITY to use revenue from ~ts
mumc~pal hotel occupancy tax to promote tourism and the convention and hotel mdustry through
lustonc restoration and preservation projects or aet~wt~es or adve~smg and conducting sohc~tatlons
and promotional programs to encourage tourists and convention delegates to ws~t preserved bastonc
s~tes or museums m the C~ty of, and
WHEREAS, the FOUNDATION ~s well eqtupped to perform those act~vmes, and
WHEREAS, Tex Tax Code §351 101(e) authonzes the CITY to delegate by contract w~th
the FOUNDATION, as an mdependent entity, the management and supervision of programs and
act~vmes of the type described heremabove funded w~th revenue from the mumc~pal hotel
occupancy tax, and
WHEREAS, the FOUNDATION has been the recipient of hotel tax funds from the C~ty for
a number of years, but has accumulated a large unspent surplus of restricted funds wlueh may not be
spent legally for any other purpose
NOW, THEREFORE, m consideration of the performance of the mutual covenants and
promises eontamed hereto, the CITY and the FOUNDATION agree and contract as follows
I. CONSIDERATION AND DEFINITIONS
1 1 Consideration
(a) For and m consideration of the act~wt~es to be performed by the FOUNDATION
under thls Agreement, the CITY agrees to extend the right to use hotel tax funds, as described m
Paragraph 1 2, and wlueh were prexnously allocated to the FOUNDATION and that are currently m
the possession of the FOUNDATION
(b) For satisfactory performance of the activities set forth ~n th~s Agreement and all
attachments hereto, the CITY shall extend the use of the hotel tax revenue to the FOUNDATION
for a per~od of two years, beg~nmng December, 15, 1998 and ending December 15, 2000 Th~s
Agreement as subject to an annual approval of a budget by the City Council and subsequent
receipt of quarterly reports as required by §351 of the Texas Tax Code
(e) The funding of this project m no way conumts the CITY to future funding of t_has
program beyond the current contract period Any future funding is solely the responsibility of the
FOUNDATION
(d) It as expressly understood that flus contract in no way obligates the General Fund or
any other momes or crechts of the CITY Further, FOUNDATION understands that funding for the
contract year 1999-2000 is expressly contangant upon City Council approval of the budget for that
respective year
1.2 Defmations. As used m flus Agreement, the following terms shall have the following
specific meanings
0) The term "hotel tax revenue" shall mean the gross momes previously
disbursed by the CITY that are now m the possession of the FOUNDATION These funds
represent funds previously collected and received by the City as mumclpal hotel occupancy
tax pursuant to Texas Tax Code §351 002 and Caty Ordinance The CITY and the
FOUNDATION reeogmze that all of these funds may not be hotel tax funds, but because
the nature of the funds have been cemprormsed by l) commingling vath other funds and 2)
transfer and handling of funds by a third and separate orgamzaUon, the FOUNDATION
agrees to spend the balance of these funds according to TEX T^x COVE §351 vathm a two-
year period Likewise, the CITY agrees to extend the use of this balance to the
FOUNDATION for the actiwt~es as stated m paragraph 2 1 and as approved by CITY
Council m the attached annual budget The balance of these funds that vail be considered the
"hotel tax revenue" is the balance as recorded an the bank account as of December 15, 1998
as $27,323 37 on the beginning date of flus contract, and any interest subsequently earned
on flus balance
01) The term "contract quarter" shall refer to any quarter of the calendar year m
winch this Agreement is m force Contract quarters vail end on March 31st, June 30th,
September 30th, and December 31st of each contract year
H USE OF HOTEL TAX REVENUE BY FOUNDATION
2.1 Use of Funds. For and m consideration of the CITY's extensaon of hotel tax fund use to the
FOUNDATION of the agreed amounts as specified above, the FOUNDATION agrees to use such
hotel tax funds only for historic restoration and preservation projects or activities or adveruslng and
conducting sollcltaUous and promotmnal programs to encourage tourists and conventaon delegates
to visit preserved historic sates or museums in the Caty of Denton, as authorized by T~x TAX CODE
§351 101(a)(5) The hotel tax funds as described in paragraph 1 2 must be used by the end of flus
two year contract period Any funds not used by mldmght December 15, 2000 shall be refunded to
CITY vathin thirty (30) days unless the CITY and the FOUNDATION equatably negoUate an
extension of flus contract or approve a new contract prior to the termmaUon date of flus Agreement
P~e2
2 2 Administrative Costs. The hotel tax funds currently in the possession of FOUNDATION
may be spent for day-to-day operaUons, supplies, salaries, office rental, travel expenses, and other
admlmstrative costs that are incurred dtrectly m the performance by the FOUNDATION of those
actiwtles specified m ¶2 1 above and are allowed by T~x T^x Corm §351 101(f)
2 3 Specific Restrictions on Use of Funds.
(a) That portion of total adrmmstratave costs of the FOUNDATION for winch hotel tax
funds may be used shall not exceed that portion of the FOUNDATION's admlmstrat~ve costs
actually incurred m conducting the actavittes 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 prmmry purpose of wlueh is not chrectly related to the promotion of local tourism and
the convenUon and hotel industry or the performance of the person's job m an efficient and
professmnal manner
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3 1 Budget.
(a) The FOUNDATION shall prepare and submit to the City Manager of the CITY an
annual budget (see Exbablt "A") as approved by the City Council for each calendar year, for such
operations of the FOUNDATION in wbach the hotel tax funds shall be used by the FOUNDATION
Tlus budget shall speeffically identify proposed expenchtures 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 relating to hotel tax funds will be expended The annual budget must be
approved m writing by the Denton City Council to authonze the expenditure of funds as stated in
Sectaon I Fmlure to subnut an annual budget may be considered a breach of contract, and if not
remedied is considered grounds for tertmnatlon of tins Agreement as stated in paragraph 4 2
(b) The FOUNDATION acknowledges that the approval of such budget by the Denton
City Council creates a fiduciary duty m the FOUNDATION with respect to the hotel tax funds
currently m possession of the FOUNDATION end as described m Paragraph 1 2 of ttus Agreement
The FOUNDATION shall expend hotel tax funds only in the manner and for the purposes specified
in th~s Agreement, TEX TAX CODE §351 101 (a)(5), and in the budget as approved by the CITY
3.2 Separate Accounts. The FOUNDATION shall mmntmn the hotel tax m a separate bank
account w~th segregated accounting, such that any reasonable person can rewew the source of
expenditures of tax funds A bank reeonmhaaon report (see Exbab~t "C") is required v~th each
quarterly report
3.3 Financial Records. The FOUNDATION shall mamtmn complete and accurate financial
records of each expenchture of the hotel tax funds made by the FOUNDATION These funds are
reqmred to be elassffied as restricted funds for audited financial purposes, and may not be used for
supporting serwces, meludmg, but not limited to, auditing fees and attorney's fees Upon
reasonably advance written request of the Denton City Councd, the City Manager or designate, or
any other person, shall make such financial records avmlable for inspection and review by the party
Page 3
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'T Corm, ch 552, as hereafter amended
3.4 Quarterly Reports. Wit!un tlurty days at, er the end of every contract quarter, the
FOUNDATION shall furmsh to CITY (1) a performance report of the work performed under thts
Agreement, in the form determined by the City Manager or designate, describing the activities
performed pursuant to thts Agreement dunng that contract quarter, and (2) a list of the expenditures
made with regard to hotel tax funds pursuant to TEX T^x CODE §351 101(c) Both the performance
and expenditure reports w~ll be m a form either deternuned or approved by the City Manager or
designate The FOUNDATION shall respond promptly to any request from the City Manager of
the CITY, or designate, for adchuonal informalaon relaUng to the aetlwtles performed under th~s
Agreement
3.5 Not~ee of Meetings. The FOUNDATION shall give the City Manager of the CITY
reasonable advance written nottce of the t~me and place of all meetings of the Denton County
Historical Foundatton's Board of Directors, as well as any other meeting of any constituency of the
FOUNDATION at which this Agreement or any matter the subject of this Agreement shall be
considered Tbas provision shall not be deemed to reqmre the FOUNDATION to give notice of any
executive session of the Executive Committee of the FOUNDATION
IV. TERiVI AND TERMINATION
4 1 Term. The term of this Agreement shall commence on December 15, 1998 and terminate at
m~dmght on December 15, 2000 Thts term shall be a period of two years
4 2 Termination W~thout Cause.
(a) Tfus Agreement may be terrmnated by e~ther party, with or w~thout cause, by g~wng
the other party sixty (60) days advance written noUce
(b) In the event this contract is terminated by either party pursuant to Section 4 2(a),
the CITY agrees to extend the use of the hotel tax funds to the Foundation for any contractual
obligations of the FOUNDATION undertaken by the FOUNDATION m satisfactory
performance of those activities specified in ¶¶2 1 and 2 2 above and that were approved by the
Council through the budget, as noted in ¶3 1 This extension ~s conditioned upon such
contractual obhgat~ons having been incurred and entered into in the good faith performance of
those services contemplated m ¶¶2 1 and 2 2 above, and further conditioned upon such
contractual obhgattons hawng a term not exceeding the full term of this Agreement
Notwithstanding any prows~on hereof to the contrary, the obhgation of the CITY to extend the
use of the hotel tax funds to the FOUNDATION or to assume the performance of any contractual
obhgattons of the FOUNDATION for or under any contract entered into by the FOUNDATION
as contemplated herein shall not exceed 66 2/3% of the current quarterly payment
(c) Further, upon termination pursuant to ¶4 2(a), the FOUNDATION will provide the
CITY l) W~thm 10 business days from the termination notffieatlon, a short-term budget of
probable expenditures for the remmnmg 60 day period between term~naUon notification and
Page 4
contract terunnataon This budget will be presented to Council for approval w~thln 10 bus~ness
days after receipt by CITY If formal approval as not given w~th~n l0 business days and the
budget does not contain any expenditures that would be prohibited by the Texas Tax Code, and
is within the current contractual period approved budget, the budget will be considered
approved, 2) W~thln 30 days, a full accounting of all expenditures not previously audited by the
City, 3) Within 5 business days of a request from the CITY, a hst~ng 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 term~nataon The FOUNDATION will be obligated to return any unused
funds or funds determined to be used improperly Any use of remaining funds after notification
of termination ~s conditioned upon such contractual obhgatlons hawng been incurred and entered
into in the good froth performance of those services contemplated in ¶¶2 1 and 2 2 above, and
further conditioned upon such contractual obhgations having a term not exceeding the full term
of th~s Agreement
4.3 Automatic Termination. Tbas Agreement shall automatically termanate upon the
occurrence of any of the follovang events
(a) The termmatxon of the legal existence of the FOUNDATION,
(b) The insolvency of the FOUNDATION, the fihng of a petition in bankruptcy, either
voluntarily or ~nvoluntanly, or an assignment by the FOUNDATION for the benefit of
crod~tors,
(c) The cont~nuation of a breach of any of the terms or conditions of flus Agreement by
either the CITY or the FOUNDATION for more than tbarty (30) days after wmten noace of
such breach ~s g~ven to the breacbang party by the other party, or
(d) The fmlure of the FOUNDATION to submit a financial quarterly report wtueh complies
w~th the reporting procedures reqmred herein and generally accepted accounting pnnc~ples
prior to the beg~nmng of the nex~ contract term, or quarterly as reqmred by Sectmn 1 3
hereof
4 4 Right to Immediate Termination Upon L~tigatlon Notwithstanding any other prows~on
of fi'as Agreement, to m~tlgate damages and to preserve ewdence and ~ssues for judicial
determmatlon, either party shall have the right to terminate tbas Agreement upon ~mmechate
notice to the other party m the event that any person has instituted htlgation concerning the
activities of the non-tenmnatmg party, and the terminating party reasonably beheves that
such activities are reqmred or protub~ted under th~s Agreement
4 5 In the event that this Agreement is 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
improperly, wthin 30 days after termmatlon of the th~s Agreement
Page 5
V GENERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing m this Agreement shall prolub~t, nor
be construed to prohibit, the agreement by the FOUNDATION w~th another private entaty, person,
or orgamzatmn for the performance of those services described ~n ¶2 1 above In the event that the
FOUNDATION enters rote any arrangement, contractual or otherwise, w~th such other enttty,
person or orgamzataon, the FOUNDATION shall canse such other entity, person, or orgamzatton to
adhere to, conform to, and be subject to all provts~ons, terms, and condmons of tbas Agreement and
to TEX TAX CODE ch 351, including repomng requirements, separate funds mmntenance, and
huntat~ons and probabxttons pertaining to expenditure of the agreed payments and hotel tax funds
5.2 Independent Contractor. The FOUNDATION shall operate as an ~ndependent contractor
as to all services to be performed under ttus Agreement and not as an officer, agent, servant, or
employee of the CITY The FOUNDATION shall have exclusive control of ~ts oparat~ons and
performance of services hereunder, and such persons, ent~t~es, or orgamzat~ons performing the same
and the FOUNDATION shall be solely responsible for the acts and onuss~ons of ~ts d~rectors,
officers, employees, agents, and subcontractors The FOUNDATION shall not be considered a
partner or joint venturer w~th the CITY, nor shall the FOUNDATION be considered nor ~n any
manner hold ~tself out as an agent or official representative of the CITY
5 3 Indemnification. The FOUNDATION agrees to mdemmfy, hold harmless, and defend the
CITY, its officers, agents, and employees from and against any and all clmms or suits for injuries,
damage, loss, or habthty of whatever k~nd or character, arising out of or ~n connection with the
performance by the FOUNDATION or those services contemplated by ttus Agreement, including
all such elatms or causes of action based upon common, constitutional or statutory law, or based, ~n
whole or m part, upon alleganons of neghgent or intentional acts of FOUNDATION, ~ts officers,
employees, agents, subcontractors, hcensces and mwtees
5 4 Assignment. The FOUNDATION shall not assign flus Agreement w~thout first obtaining
the written consent of the CITY
5.5 Not, ce. Any notrce reqmred to be g~ven under this Agreement or any statute, orchnance, or
regulatton, shall be effective when g~ven m writing and deposited m the Umted States mml, cemfied
mml, return receipt requested, or by hand-dehvery, addressed to the respact~ve pames as follows
C~ty Manager Chair, Board of Trustees
C~ty of Denton Denton County Htstoncal Foundation, Inc
215E McKmney P O Box2184
Denton, TX 76201 Denton, TX 76202
5 6 Inurement. Tlus Agreement and each prov~smn hereof, and each and every right, duty,
obhgat~un, and habfl~ty set forth hereto shall be binding upon and inure to the benefit and obhgat~on
of the CITY and the FOUNDATION and their respective successors and assigns
Page 6
5 7 Appliealaon of Laws. All terms, eonchtlons, and provisions of this Agreement are subject
to all applleable federal laws, state laws, the Charter of the C~ty of Denton, all ordinances passed
pursuant thereto, and all judxclal determinations relative thereto
5 8 Exclusive Agreement. Tbas Agreement contains the entire understanding and constitutes
the entire agreement between the partaes hereto eoneermng the subject matter contained hereto
There are no representations, agreements, arrangements, or understandings, oral or written, express
or lmphed, between or among the part,es hereto, relaUng to the subject matter of th~s agreement,
which are not fully expressed harem The terms and con&t~ons of tlus Agreement shall prevail,
notwathstanchng any variance ~n tins Agreement from the terms and conditions of any other
document relating to tlus transaction or these transactions
5 9 l)uplieate Originals. Tlus Agreement is executed m duphcate originals
5.10 Headmgs. The heachngs and subheadings of the various sections and paragraphs of this
Agreement are inserted merely for the purpose of eonvemence and do not express or ~mply any
hm~tat~on, defimt~on, or extension of the specific terms of the sectaon and paragraph so designated
5 11 Severabfli~y. If any seetmn, subsection, paragraph, sentence, clause, phrase or word ~n tbas
Agreement, or appheatmn thereof to any person or circumstance is held mvahd by any court of
competent junsd~etmn, such holding shall not affect the valldaty of the rema~umg portions of th~s
Agreement, and the part, es hereby declare they would have enacted such remaamng portions despite
any such mvalachty
EXECUTED thls _~__~_ day of z~/?~/~ J ,1998
THE CITY OF DENTON, TEXAS
JACK. ER, MAYOR
ATTEST . _APP~
By % t~xx~ ~ ~,~ ~[~0J~ ~tS~Y ~ ~'~"~P~)UTY ~
dl~'~'~.LTERS, - J ' ~,.B~R'T~ PROUTY, J
By ~C h~~~
Page 7
ATTEST APPROVED AS TO LEGAL FORM
By By
Secretary
Page 8
DENTON COLNTY HISTORICAL FOUNDATION, INC.
P O Box 2184
Denton Texas 76202
DENTON COUNTY HISTORICAL FOUNDATION, INC.
PROPOSED BUDGET 1998-1999
LALOR FUNDS - CITY OF DENTON, TEXAS
1996-1997 1997-1998 1998-1999
Lalor Fund o $5,048 *Lalor Fund $ 7,600 * Reserve $ 5,586
D~sbursemens * D~sbursements
00E $1ldes /Phots 1 00E $11des 250
00E ~rchlves 2 00E Archives 350
00E Publication 3.00E Publication
2,500 1100
REprint 3.01E REprint
Broc/Maps 3.02E Broc/maps
00E Pro3 Equip 4.00E Pro3 Equip 200
supplies supplies
0OE Hemb training 5.00E Training 100
subscriptions Mem dues
00E Heritage 1,000 6.00E Herrltage 400
pro3 marker
01E Marker 500 6 01E His Marker 800
02E Cemetery 6.02E Cem Pro3
5.03E Preserv 548 6 03E Preserv 800
0~E Bus Offxce 7.00E Office 514
operations
0IE 7 O1E Audit/IRS 800
00E 8 00E Hist Educ 172
00E 9 00E Capitol 100
improvement
00E 10 OOE H~st Prev
TOTAL $5,048 TOTAL $ 5,586 -
'Lalor fund was denied by the C~ty of Denton for 1997-1998
Reserve fund of $ 11,172 w~ll be d~v~de~, between ~998-1999 and [999
2000
DENTON COUNTY HISTORICAL FOUNDATION, INC.
P O Box 218a
Denton Texas 76202
August 4, 1998
DENTON COUNTY HISTORICAL FOUNDATION, INC HOTEL-MOTEL TAX
RECOMMENDATION C.D. ACCOUNT
Th~ Denton County Historical Foundation has designated entire
amount of the C D to be used to re-furbish the !935 Plrsch
Fire Truck and some type of building designed for visitors to
be able to view the truck at all times The site that has been
choosen is ad3acent to the Flrefighters Memorial on Mulberry
Our desire is to have the truck functional to participate in
parades and used for other functions in the City of Denton
MARVOURENE MATTHEWS, CHAIRPERSON
OLIVE STEPHENS, SECRETARY
DENTON COUNTY HISTORICAL FOUNDATION, INC.
P 0 Box 2184
Denton Texas 76202
TO WHOM IT ,MAY CONCERN
DENTON COUNTY HISTORICAL FOUNDATION, INC
C.D ~CCOUNT ~87173 FIRST STATE B~NK, DENTON, TEXAS
BALANCE AS OF JANUARY 1, 1998 $ 16,286 42
OLIVE STEPHENS, SECRETARY