1997-246AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON COUNTY HISTORICAL
MUSEUM FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND
PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the Mayor ~s hereby authorized to execute an agreement between the
Ctty of Denton and the Denton County H~stoncal Museum for the payment and use of hotel tax
revenue, under the terms and cond~txons contained m the agreement, a copy of which ts attached
hereto and made a part hereof
SECTION II That th~s ordinance shall become effecttve tmmedlately upon tts passage
and approval
PASSED AND APPROVED thts thetS~q ~ day of ~e~ ,
1997
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
XGREEMEHT BETWEEN THE CITY OF DENTON AND
THE DEHTON OOUMTY HTSTORIC~,L MUSEUM (97-98)
PROVIDING FOR THE P~.YMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a muni-
cipal corporation (the "city"), and the Denton County Historical
Museum, a non-profit corporation incorporated under the laws of the
State of Texas (the "Museum"):
WHEREAS, TEX. TAX CODE S 351.002 authorizes the CITY to levy
by ordinance a municipal hotel occupancy tax ("hotel tax") not
exceeding seven percent (7%) of the conslderat~on paid by a hotel
occupant; and
WHEREAS, by Ordinance, the CITY has provided for the assess-
ment and collection of a municipal hotel occupancy tax ~n the city
of Denton of seven percent (7%); and
WHEREAS, TEX. TAX CODE §351.101 (a) (5) authorizes the CITY to
use revenue from 1ts municipal hotel occupancy tax to promote
tourism and the conventlon and hotel industry performing historical
restoration and preservation projects or activities or advertising
and conducting solicitations and promotional programs to encourage
tourists and convention delegates to visit preserved historic sites
or museums at or in the immediate vicinity of convention center
facilities, or located elsewhere in the municipality or its
vicinity that would be frequented by tourlsts, convention dele-
gates, or other visitors to the municipalIty; and
WHEREAS, the MUSEUM is well equipped to perform those
activities; and
WHEREAS, TEX. TAX CODE §351.101 (c) authorlzes the CITY to
delegate by contract with the MUSEUM as a private organization the
management and supervision of programs and activities of the type
descrlbed hereinabove funded with revenue from the municipal hotel
occupancy tax;
NOW, THEREFORE, in conslderatlon of the performance of the
mutual covenants and promises contained here~n, the CITY and the
MUSEUM agree and contract as follows,
I. HOTEL TAX REVENUE P~YMENT TO MUSEUM
~.l Conside~ation. For and in consideration of the activities to
be performed by the MUSEUM under this Agreement, the CITY agrees to
pay to the MUSEUM 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 MUSEUM sometimes herein referred to as
"the agreed payments" or "hotel tax funds")
1.2 Amount of Payments to Museum.
(a) As used in this agreement, the following terms shall have
the following specific meanings:
(1) The "hotel tax revenue" shall mean the monies col-
lected and received by the CITY during any relevant period of
time (i.e., fiscal year or fiscal quarter) as municipal hotel
occupancy tax at the rate of seven percent (7%) of the price
paid for a room in a hotel, pursuant to TEX. TAX CODE §351.002
and City Ordinance, together with and including any sums of
money received by the CITY from taxpayers during any relevant
fiscal quarter or calendar month as attorney's fees, court
costs, or other expenses of collection of hotel tax, but
excluding interest and penalties received by the CITY from
ta.xpayers.
(ii) The term "base payment amount" shall mean an amount
of money equal to the total hotel tax revenue collected by the
CITY during any relevant period of time (~.e. fiscal year or
fiscal quarter), lass (1) such amounts incurred durlng such
re.levant period of time for costs of collection of hotel taxes
from taxpayers or auditing taxpayers for tax payment compli-
ance, such collection and auditing costs to include fees paid
to attorneys or agents not in the regular employ of the CITY
and which attorneys or agents effect collectlon of the hotel
tax from taxpayers or audit such taxpayers; and (2) court
costs and expenses incurred in litigation against or auditing
of such taxpayers.
(b) The CITY shall pay to MUSEUM an amount of money equal to
eight and ninety one hundredths of a percent (8.90%) of the base
payment amount for the period of October 1, 1997, through September
30, 1998 or Slxty Thousand, Three Hundred Eight Dollars
($60,308.00), whichever is less.
1.3 Dates of Payments to Museum.
(a) The term "quarterly payments" shall mean payments by the
CITY to the MUSEUM of those amounts specified in 41.2 above as
determined by the hotel tax revenue collected by the CITY during
any one fiscal quarter during the term of this Agreement.
(b) CITY shall pay the MUSEUM the agreed payments specified
in 41.2 above by quarterly payments paying eight and ninety one
hundredths of a percent (8.90%) of the base payment amount
(quarterly) for the first three quarters of the fiscal year and the
percentage of the base payment amount for the last quarter of the
fiscal year shall be adjusted so that the total of the quarterly
base payment amounts shall not exceed Sixty Thousand, Three Hundred
Eight Dollars ($60,308.00) during the 1997-98 fiscal year. Each
such quarterly payment shall be paid to the MUSEUM on or before the
PAGE 2 ~
forty-fifth (45th) day after the last day of such respective fiscal
quarter for which such payment is due. If quarterly financial and
performance reports are not received within thirty (30) days of the
end of the applicable quarter, then CITY may withhold the quarterly
payment(s) until the appropriate reports are received and approved.
(c) The funding of this project in no way commits the CITY to
future funding of this program beyond the current contract period.
Any future funding is solely the responsibility of the MUSEUM.
(d) It is expressly understood that this contract in no way
obligates the General Fund or any other monies or credits of the
CITY.
II. USE OF HOTEL TAX REVENUE BY MUBEUM
2.1 Use of FunSs. For and in consideration of the payment by the
CITY to the MUSEUM of the agreed payments of hotel tax funds
specified above, the MUSEUM agrees to use such hotel tax funds only
for the following purposes:
(a) advertising and conducting solicitations and promotional
programs to attract tourists and convention delegates or regis-
trants to the municipality or 1ts vicinity; and
(b) historical restoration and preservation projects or
activities or advertising and conducting solicitations and promo-
tional,programs to encourage tourists and convention delegates to
visit preserved historic sites or museums;
(i) at or in the immediate vicinity of convention center
facilities or visitor information centers; or
(ii) located elsewhere in the municipality or its
vicinity that would be frequented by tourists and convention
delegates.
as authorized by TEX. TAX CODE § 351.101(a) (3) & (5).
2.2 &~hninistrative Costs. The hotel tax funds received from the
CITY by the MUSEUM may be spent for day-to-day operations, sup-
plies, salaries, office rental, travel expenses, and other admini-
strative costs that are incurred directly in the performance by the
MUSEUM of those activities specified in 42.1 above and are allowed
by TEX, TAX CODE § 351.101(f).
2.3 Speoifio Restriotions on Use of Funds.
(a) That portion of total administrative costs of the MUSEUM
for which hotel tax funds may be used shall not exceed that portion
of the MUSEUM'S administrative costs actually incurred in con-
ducting the activities 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
which ls not directly related to the promotion of tourism and the
convention and hotel industry or the performance of the person's
]ob in an efficient and professional manner.
III. RECORD KEEPING~h'DREPORTING REQUIREMENTS
3.1 Budget.
(a) On or about September i and prior to the disbursement of
any funds for the 1997-98 fiscal year, the MUSEUM shall prepare and
submit to the Clty Manager of the CITY an annual budget for such
fiscal year for the MUSEUM and any other operation or function of
the MUSEUM in which the hotel tax funds shall be used by the
MUSEUM. This budget shall specifically Identify proposed
expenditure of hotel tax funds by the MUSEUM 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
CITY shall not pay to the MUSEUM any hotel tax revenues as set
forth in Section I. of this contract during any fiscal year of this
Agreement unless a budget for such respective fiscal year has been
approved in writing by the Denton city Council authorizing the
expenditure of funds in such Section I.
(b) The MUSEUM acknowledges that the approval of such budget
by the Denton City Council creates a fiduciary duty in the MUSEUM
with respect to the hotel tax funds paid by the CITY to the MUSEUM
under this Agreement. The MUSEUM shall expend hotel tax funds only
in the manner and for the purposes specified in § 351.101(a) (3) &
(5) TEX. TAX CODE and in the budget as approved by the CITY.
3.2 Separate Accounts. The MUSEUM shall maintain any hotel tax
funds paid to the MUSEUM by the CITY in a separate account.
3.3 Financial Reoords. The MUSEUM shall maintain complete and
accurate financial records of each expenditure of the hotel tax
funds made by the MUSEUM and, upon reasonably advance written re-
quest of the Denton city Council or the City's Assistant City
Manager of Finance or his designee or other person, shall make such
financial records available for inspection and review by the Denton
City Council or the City's Assistant City Manager of Finance or his
designee or other person.
3.4 Q~arterly Reports. Within thirty days after the end of every
quarter, the MUSEUM shall furnish to the CITY (1) a performance
report of the work performed under this Agreement, in the form
determined by the City Manager describing the activities performed
under this Agreement during that quarter, and (2) a list of the
expenditures made with regard to hotel tax funds pursuant to the
TEX. TAX CODE ANN. § 351.101(c) (Vernon 1994). The MUSEUM shall
promptly respond to any request from the City Manager of the CITY
4
for additional information relating to the activities performed
under this Agreement.
3.5 NQt~oe of Meetings. The MUSEUM shall give the City Manager of
/~% CITP'~ advance written notice of the time and place of
'~eneral meetings of the Denton County Historical Museum Board of
Directors as well as any other meeting of any constituency of the
MUSEUM at which this Agreement or any matter the subject of thl~
~ Agreement shall be considered. This provision shall not be deemeo
to require the MUSEUM to give notice of any executive session of
the Executive Committee of the MUSEUM
IV. REIMBURSRMENTAND INDEMNIFICATION
4.1 Reimbursement of Museum for Administrative Costs. In the
event that this Agreement is terminated pursuant to Section 5.2(a),
the CITY agrees to reimburse the MUSEUM for any and all expenses
and costs undertaken by the MUSEUM in performance of those
activities specified in ~2.1 above or expenses or costs ~ncurred by
the MUSEUM as described in ~2.2 above. The CITY is obligated to
reimburse the MUSEUM for expenses and costs as described in ~2.2
above only for the period commencing upon the date notice of
termination is given and ending upon the date of termination.
Further, this obligation shall be limited to the lesser of the
actual expenses and costs incurred by the MUSEUM during the one
hundred eighty day period preceding termination or the agreed
payments otherwise due and payable to the MUSEUM for such period.
4.~ Reimbursement of Museum for contractual Obligations. Iht he
event that this Agreement is terminated pursuant to Section 5 2(a),
the CITY agrees to reimburse the MUSEUM for any and all contractual
obligations of the MUSEUM undertaken by the MUSEUM in performance
of those services specified in ~2.1 above, conditioned upon such
contractual obligations having been incurred and entered into in
the good faith performance of those services contemplated in ~2.1
above, and further conditioned upon such contractual obligations
having a term not exceeding the full term of th~s Agreement
Notwithstanding any provision hereof to the contrary, the obliga-
tion of the CITY to reimburse the MUSEUM or to assume the perfor-
mance of any contractual obligations of the MUSEUM for or under any
contract entered into by the MUSEUM as contemplated here~n shall
not exceed THREE THOUSAND DOLLARS ($3,000.00). Such monetary
limitation is cumulative of all contractual obligations and shall
not be construed as a monetary limitation on a per contract basis
4.3 P&yment of Reimbursement to Museum.
(a) With respect to expenses and costs incurred by the MUSEUM
for which the CITY is obligated to reimburse the MUSEUM pursuant to
~4.1 above, the CITY shall pay such reimbursement amount due, if
any, to the MUSEUM on or before the forty-fifth (45th) day after
the date of termination of this Agreement.
(b) With respect to contractual obligations undertaken by the
MUSEUM.for which the CITY is obligated to reimburse the MUSEUM as
provided in 44.2 above, the CITY shall reimburse the MUSEUM for
such monetary obligations required in such contractual oblIgation
in such amounts and at those times such contractual costs and
expenses are due and payable according to the terms of such
contract limitation set forth in 44.2 above.
4.4 In~em~ifio&tion. The MUSEUM agrees to indemnify, hold
harmless, and defend the CITY, its officers, agents, and employees
from and against any and all claims or suits for injuries, damage,
loss, or liability of whatever kind or character, arising out of or
in connection with the performance by the MUSEUM or those services
contemplated by this Agreement, including all such claims or causes
of action based upon common, constitutional or statutory law, or
based, in whole or in part, upon allegations of negligent or
intentional acts of MUSEUM, its officers, employees, agents,
subcontractors, licensees and lnvitees.
4.5 Insurance. The MUSEUM shall provide insurance as follows:
$500,000 Commercial General Liability
Statutory Workers' Compensation and Employers' Liability
($250,000/$500,000/$250,000)
$500,000 Business Automobile Liability
The CITY must be named as an additional insured (except Workers'
compensation) and proof of coverage shall be submitted prior to any
payment by the CITY.
V. TERM AND TERMINATION
5.1 Term. The term of this Agreement shall commence on October 1,
1997 a~d terminate at midnight on September 30, 1998. This term
shall be a period of one year.
5.2 Termination.
(a) This Agreement may be terminated by either party by
giving the other party one hundred eighty (180) days advance
written notice.
(b) This Agreement shall automatically terminate upon the
occurrence of any of the following events:
(i) The termination of the corporate existence of the
MUSEUM;
(11) The insolvency of the MUSEUM, the filing of a
petition in bankruptcy, either voluntarily or Involuntarily,
or an assignment by the MUSEUM for the benefit of creditors,
(ill) The continuation of a breach of any of the terms
or conditions of this Agreement by either the CITY or the
MUSEUM for more than thirty (30) days after written notice of
such breach is given to the breaching party by the other
party; or
(iv) The failure of the MUSEUM to submit a financial
report which complies with the reporting procedures required
herein and generally accepted accounting principles prior to
the beginning of the next contract term.
VI. ~ENEI~,L PROVISIONS
6.1 Suboontraot for Performance of services. Nothing ~n th~s
Agreement shall prohibit, nor be construed to prohibit, the agree-
ment by the MUSEUM with another private entity, person, or organi-
zation for the performance of those services described in 42.1
above. In the event that the MUSEUM enters into any arrangement,
contractual or otherwise, with such other entity, person or organi-
zation, the MUSEUM shall cause such other entity, person, or orga-
nization to adhere to, conform to, and be subject to all provi-
sions, terms, and conditions of this Agreement and to TEX. TAX CODE
Chap. 351, including reporting requirements, separate funds main-
tenance, and limitations and prohibitions pertaining to expenditure
of the agreed payments and hotel tax funds.
6.2 Independent Contractor. The MUSEUM shall operate as an
independent contractor as to all services to be performed under
th~s Agreement and not as an officer, agent, servant, or employee
of the CITY. The MUSEUM shall have exclusive control of its
operations and performance of services hereunder, and such persons,
entitles, or organizations performing the same and the MUSEUM shall
be solely responsible for the acts and omissions of 1ts directors,
officers, employees, agents, and subcontractors. The MUSEUM shall
not be considered a partner or joint venturer with the CITY, nor
shall the MUSEUM be considered nor in any manner hold itself out as
an agent or official representative of the CITY.
6.3 Assignment. The MUSEUM shall not assign this Agreement
without first obtaining the written consent of the CITY
6.4 Notice. Any notice required to be given under th~s Agreement
or any statute, ordinance, or regulation, shall be effective when
given in writing and deposited in the United States mall, certified
mall, return receipt requested, or by hand-delivery, addressed to
the respective parties as follows:
CITY MUSEUM
City Manager Chair, Board of Trustees
City of Denton Denton County Historical Museum
215 E. McKinney P.O. Box 2800
Denton, TX 76201-4299 Denton, TX 76202
Hand Delivery:
110 W. Hickory
Denton, TX 76201
6.$ In~rement. This Agreement and each provision hereof, and each
and every right, duty, obligation, and liabIlity set forth herein
shall be binding upon and inure to the benefit and obligation of
the CITY and the MUSEUM and their respective successors and
assigns.
$.6 Applioation of Laws. Ail terms, conditions, and provisions of
this Agreement are subject to all applicable federal laws, state
laws, the Charter of the City of Denton, all ordinances passed
pursuant thereto, and all judicial determinations relative thereto
6.7 Ezclusivs Agreement. This Agreement contains the entire
understanding and constitutes the entire agreement between the
parties hereto concerning the subject matter contained herein.
There are no representations, agreements, arrangements, or under-
standings, oral or written, express or implied, between or among
the parties hereto, relating to the subject matter of this agree-
ment, which are not fully expressed herein. The terms and con-
dltlons of this Agreement shall prevail notwithstanding any
variance in this Agreement from the terms and conditions of any
other document relating to this transaction or these transactions.
6.8 Duplioate Originals. This Agreement is executed in duplicate
originals.
6.9 Headings. The headings and subheadings of the various sec-
tlons and paragraphs of this Agreement are inserted merely for the
purpose of convenience and do not express or imply any limitation,
definition, or extension of the specifIc terms of the section and
paragraph so deslgnat~7~t
THE CITY OF DENTON, TEXAS
By: JAC~
PAGE
ATTEST~ APPROVED AS TO LEGAL FORM
J~IPE~-WALTERS,- HERBERT L. PROUTY,
Ci%~q SECRETARY CITY ATTORNEY
DENTON COUNTY HISTORICAL MUSEUM
,
~hai~/-~oar~ of Trustees
ATTEST: APPROVED AS TO LEGAL FORM:
By: By:
Secretary
A \MUSEUM. K
PAGE 9