1997-247NOTE Amended by Ordinance No. 98-295
ORDINANCE NO ~7- ~4~
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON FESTIVAL 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
SECTION I That the Mayor is hereby authorized to execute an agreement between the
C~ty of Denton and the Denton Festival Foundation, Inc for the payment and use of hotel tax
revenue, under the terms and condmons contained in the agreement, a copy of wMch ~s attached
hereto and made a part hereof
SECTION II That thru ordinance shall become effective tmmedtately upon its passage
and approval
1997
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
ORDINANCE NO ~f -~,~,~
AN ORDINANCE OF THE CITY OF DENTON, TEXAS EXTENDING ELEVEN
CONTRACTS BETWEEN THE CITY OF DENTON, TEXAS AND THE NOTED CURRENT
RECIPIENTS OF HOTEL OCCUPANCY TAX ("HOT") FUNDS, AND PRESCRIBING AN
EFFECTIVE DATE
WHEREAS, on September 2, 1997, the Counctl of the Ctty of Denton, Texas passed
Ordinance numbers 97-243, 97-:144, 97-245, 97-:147, 97-248, 97-249, 97-250, 97-251, 97-252, 97-
253 and 9?-254, (the "Approval Ordinances") approwng and authorizing funding for certain
contracts w~th a n~mber of outside orga,azattons for Ftscal Year ("FY") 97-98, pursuant to Chapter
351 of the Texas Tax Code, and
WHEREAS, each of the aforesmd contracts prowded for post-performance reimbursement
of servtces rendered dunng each quarter of the fiscal year m the promotion of tourism, and
WHEREAS, tn the future, the C~ty Counml wtshes to award such momes on a quarterly
basts, tn advance of performance, during each quarter of the calendar year, commencing w~th
Calendar Year 1999, and
WHEREAS, as a result of the foregomg, it will be necessary to extend the term of the
ex~st~ng con~acts for three months, m order to secure performance of these servtces dunng the
months of October, November and December of 1998, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the terms of the contracts authorized by the aforementtoned Approval
Ordinances are hereby authorized by the C~ty of Denton to be extended under their existing terms
for a period of three months, except that paragraphs 1 2(b) and 5 1 of each such contract are hereby
modffied upon acceptance to the extent that they are ~ncons~stent w~th tins Ordinance, such that all
dutres set forth for performance prior to September 30, 1998 shall be performed by December 31,
1998, and such that no addtt~onal payment to the other parttes named in smd contracts for servmes
rendered during October, November and December 1998, shall be prod after payment of the fourth
quarter payment already defined m the contract
SECTION II That passage of tlus ordinance constitutes a revocable offer of the City of
Denton, Texas, Much may be accepted by each of the other part, es, etther by written confirmatton,
or by performance of the duttes set forth m the apphcable contracts during the extended term, after
dehvery of a copy of tins ordinance to the other parttes, m the manner estabhshed m paragraph 6 5
of each apphcable contract
SECTION III That thas ordmance shall become effective tmmedmtely upon ~ts passage and
approval
Page 1 of 2
PASSED AND APPROVED this the /,5/ --day of ,1998
JAC~L~,~,R, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
Page 2 of 2
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON FESTIVAL FOUNDATION, INC. (97-98)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the city of Denton, Texas, a muni-
cipal corporation (the "CITY"), and the Denton Festival Foundation,
Inc., 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 provided for the assess-
ment and collection of a municipal hotel occupancy tax in 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 industry by advertising and conducting
solicitations and promotional programs to attract tourists and
convention delegates or registrants to the municipality or its
vicinity; and
WHEREAS, the FOUNDATION is well equipped to perform those
activities; and
WHEREAS, TEX. TAX CODE §351.101 (c) authorizes the CITY to
delegate by contract with the FOUNDATION as an independent entity
the management and supervision of programs and activities of the
type described herelnabove funded with revenue from the municipal
hotel Occupancy tax;
NOW, THEREFORE, in consideration of the performance of the
mutual covenants and promises contained herein, the CITY and the
FOUNDATION agree and contract as follows,
I. HOTEL TAX REVENUE PAYMENT TO FOUNDATION
1.1 Coneideration. For and in consideration of the activities to
be performed by the FOUNDATION under this 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 sometimes
herein referred to as "the agreed payments" or "hotel tax funds").
~.z ~uount of Palmsnts ~o Foundation.
(a) As used in this agreement, the following terms shall have
the following specific meanings:
(i) 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
taxpayers.
(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 (i.e. fiscal year or
fiscal quarter), less (1) such amounts incurred during such
relevant 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 collection 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 FOUNDATION an amount of money equal
to five and ninety one hundredths of a percent (5.90%) of the base
payment amount for the period of October 1, 1997 through September
30, 1998 or Forty Thousand Dollars ($40,000.00), whichever is less.
1.3 Da~es of Payments to Poundation.
(a) The term ,,quarterly payments" shall mean payments by the
CITY to the FOUNDATION 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 FOUNDATION the agreed payments
specified in 41.2 above by quarterly payments paying five and
ninety one hundredths of a percent (5.90%) 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 Forty Thousand
Dollars ($40,000) during the 1997-98 fiscal year. Each such
PAGE 2
quarterly payment shall be paid to the FOUNDATION on or before the
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 FOUNDATION.
(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. UBE OF HOTEL T~X REVENUE BY FOUNDATION
2.1 USS of Funds. For and in consideration 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 advertising and conducting solicitations and promotional
programs to attract tourists and convention delegates or regis-
trants to the municipality or its vicinity, as authorized by TEX
TAX CODE § 351.101(a).
2.2 Administrative Costs. The hotel tax funds received from the
CITY by the FOUNDATION 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
FOUNDATION of those activities specified in 42.1 above and are
allowed by TEX. TAX CODE § 351.101(f).
2.3 Bpsoifio Rsstriotions on Uss of Funds.
(a) That portion of total administrative costs of the
FOUNDATION for which hotel tax funds may be used shall not exceed
that portion of the FOUNDATION'S administrative costs actually
incurred in conducting the activities speclfled in 42.1 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 is not directly related to the promotion of tourism and the
convention and hotel industry or the performance of the person's
job in an efficient and professional manner.
PAGE 3
~. RECORD KEEPZNG i%ND REPORTING REQUIREMENTS
3.~ B~dget.
(a) On or about September I and prior to the disbursement of
any funds for the 1997-98 fiscal year, the FOUNDATION shall prepare
and submit to the City Manager of the CITY an annual budget for
such fiscal year for the FOUNDATION and any other operation or
function of the FOUNDATION in which the hotel tax funds shall be
used by the FOUNDATION. This budget shall specifically identify
proposed expenditure 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 CITY shall not pay to the FOUNDATION 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 FOUNDATION acknowledges that the approval of such
budget by the Denton City Council creates a fiduciary duty in the
FOUNDATION with respect to the hotel tax funds paid 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
in § 351.101(a) TEX. TAX CODE and in the budget as approved by the
CITY.
3.2 ~ep&r&~e Accounts. The FOUNDATION shall maintain any hotel
tax funds paid to the FOUNDATION by the CITY in a separate account
3.3 Fin&noi&l Records. The FOUNDATION shall maintain complete and
accurate financial records of each expenditure of the hotel tax
funds made by the FOUNDATION and, upon reasonably advance written
request of the Denton city Council or the City's Assistant city
Manager of F~nance or his designee or other person, shall make such
financial records avallable 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 Quarterly Reports. W~thin thirty days after the end of every
quarter, the FOUNDATION 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 FOUNDATION
shall promptly respond to any request from the City Manager of the
CITY for additional information relating to the activities
performed under this Agreement.
PAGE 4
of the CITY ~ advance written notice of the time and place
of general meetings of the Denton Festival Foundation, Inc. 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. This provision shall not be
deemedlto require the FOUNDATION to give notice of any executive
sesslo~ of the Executive Committee of the FOUNDATION.
IV. REIMBURSEMENTS%ND INDEMNIFICATION
4.1 Reimbursement of &ssooiation for A~ministrative Costs. In the
event ~hat this Agreement is terminated pursuant to Section 5.2(a),
the CITY agrees to reimburse the FOUNDATION for any and all
expenses and costs undertaken by the FOUNDATION in performance of
those activities specified in ~2.1 above or expenses or costs
incurred by the FOUNDATION as described in ~2.2 above. The CITY is
obligated to reimburse the FOUNDATION 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
lesserlof the actual expenses and costs incurred by the FOUNDATION
duringlthe one hundred eighty day period preceding termination or
the agreed payments otherwise due and payable to the FOUNDATION for
such period.
4.2 R~mbureement of Foundation for Contractual Obligations. In
the event that this Agreement is terminated pursuant to Section
5.2(a)~ the CITY agrees to reimburse the FOUNDATION for any and all
contractual obligations of the FOUNDATION undertaken by the
FOUNDATION in performance of those services specified in ~2.1
above, i conditioned upon such contractual obligations having been
· ncurred and entered into in the good faith performance of those
services contemplated in ~2.1 above, and further conditioned upon
such c~ntractual obligations having a term not exceeding the full
term o~ this Agreement. Notwithstanding any provision hereof to
the contrary, the obligation of the CITY to reimburse the FOUNDA-
TION or to assume the performance of any contractual obligations of
the FOUNDATION for Or under any contract entered into by the
FOUNDATION as contemplated herein shall not exceed TWO THOUSAND
DOLLARS ($2,000.00). Such monetary limitation is c~mulatlve of. all
contractual obligations and shall not be construe~ as a mone=ary
limitation on a per contract basis
4.3 P&~ment of Reimbursement to Foundation.
(~) With respect to expenses and costs incurred by the
FOUNDATION for which the CITY is obligated to reimburse the
FOUNDATION pursuant to ~4.1 above, the CITY shall pay such
PAGE 5
reimbursement amount due, if any, to the FOUNDATION 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
FOUNDATION for which the CITY is obligated to reimburse the
FOUNDATION as provided in 44.2 above, the CITY shall reimburse the
FOUNDATION for such monetary obligations required in such contrac-
tual 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~emnifio&tion. The FOUNDATION agrees to indemnify, hold
harmless, and defend the CITY, its officers, agents, and employees
from and against any and all claims or suits for in]urles, damage,
loss, or liability of whatever kind or character, arising out of or
in connection with the performance by the FOUNDATION 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 FOUNDATION, its officers, employees, agents,
subcontractors, licensees and invitees.
4.5 Insur&noe. The FOUNDATION 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 TERMIN&TION
5.1 Tezla. 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:
PAGE 6
(i) The termination of the legal existence of the
FOUNDATION;
(ii) The insolvency of the FOUNDATION, the filing of a
petition in bankruptcy, either voluntarily or involuntarily,
or an assignment by the FOUNDATION for the benefit of credi-
tors;
(iii) The continuation of a breach of any of the terms
or conditions of this Agreement by either the CITY or the
FOUNDATION 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 FOUNDATION 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 Suboontr&ct for Performance of Services. Nothing in this
Agreement shall prohibit, nor be construed to prohibit, the agree-
ment by the FOUNDATION with another private entity, person, or
organization for the performance of those services described in
42.1 above. In the event that the FOUNDATION enters into any
arrangement, contractual or otherwise, with such other entity,
person or organization, the FOUNDATION shall cause such other
entity, person, or organization to adhere to, conform to, and be
subject to all provisions, terms, and conditions of this Agreement
and to TEX. TAX CODE Chap. 351, including reporting requirements,
separate funds maintenance, and limitations and prohibitions
pertaining to expenditure of the agreed payments and hotel tax
funds.
6.2 Independent Contractor. The FOUNDATION shall operate as an
independent contractor as to all services to be performed under
this Agreement and not as an officer, agent, servant, or employee
of the CITY. The FOUNDATION shall have exclusive control of its
operations and performance of services hereunder, and such persons,
entities, or organizations performing the same and the FOUNDATION
shall be solely responsible for the acts and omissions of its
directors, officers, employees, agents, and subcontractors. The
FOUNDATION shall not be considered a partner or joint venturer with
the CITY, nor shall the FOUNDATION be considered nor in any manner
hold itself out as an agent or official representative of the CITY
6.3 Aesig~ment. The FOUNDATION shall not assign this Agreement
without first obtaining the written consent of the CITY.
PAGE 7
6.4 Notice. Any notice required to be given under this Agreement
or any statute, ordinance, or regulation, shall be effective when
given in writing and deposited in the United States mail, certified
mall, return receipt requested, or by hand-delivery, addressed to
the respective parties as follows:
CITY FOUNDATION
City Manager Chairman/Director
city of Denton Denton Festival Foundation, Inc.
215 E. McKinney P.O. Box 2104
Denton, TX 76201-4299 Denton, TX 76201
319 Pennsylvania Dr.
Denton, TX 76205
6.5 Inurement. 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 FOUNDATION and their respective successors and
assigns.
6.6 Appl~o&tion 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 EXolusive 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 ~mpl~ed, 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-
dltions of this Agreement shall prevail notwithstanding any
variance in this Agreement from the terms and cond~tlons of any
other document relating to this transaction or these transactions.
6.8 DUplicate originals. This Agreement ~s executed in duplicate
originals.
6.9 Headings. The headlngs 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 designated.
PAGE 8
THE CITY OF DENTON, TEXAS
By: JACK~ ~
ATTEST: APPROVED AS TO LEGAL FORM:
~NNI~E~ WALTERg,- HERBERT n. PROUTY,
UITY S~CRETARY CITY ATTORNEY
DENTON FESTIVAL FOUNDATION, INC.
Chairman/Director
ATTEST: APPROVED AS TO LEGAL FORM:
By: By:
Secretary
A~ \FESTIVAL K
PAGE 9