1997-249NOTE Amended by Ordinance No. 98-295
ORDINANCE NO
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON HOLIDAY FESTIVAL
ASSOCIATION, 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
City of Denton and the Denton Holiday Festival Association, Inc for the payment and use of
hotel tax revenue, under the terms and conditions contmned in the agreement, a copy of whmh is
attached hereto and made a part hereof
SECTION II That this ordinance shall become effective ~mmedlately upon ~ts passage
and approval
PASSED AND APPROVED this the~ /?~/
1997
JACK~LER, MAYOR
ATTEST
JENNiFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
AGREEMENT BETWEEN THE CITY OF DENTON P, ND
THE DENTON HOLIDAY FESTIVAL ASSOCIATION, INC. (97-98)
PRov'rD~'NG FOR THE PAYMENT ~ND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the city of Denton, Texas, a muni-
cipal corporation (the "CITY"), and the Denton Holiday Festival
Association, Inc., a legal entity existing under the laws of the
State of Texas (the "ASSOCIATION"):
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 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 S351.101 (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 mun~clpallty or its
vicinity; and
WHEREAS, the ASSOCIATION is well equipped to perform those
activities; and
WHEREAS, TEX. TAX CODE §351.101 (c) authorizes the CITY to
delegate by contract with the ASSOCIATION as an independent entity
the management and supervision of programs and activities of the
type described hereinabove 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
ASSOCIATION agree and contract as follows,
I. HOTEL TAX REVENUE PAYMENT TO ASSOCIATION
1.1 Consi~eration. For and in consideration of the actlvltles to
be performed by the ASSOCIATION under this Agreement, the CITY
agrees to pay to the ASSOCIATION a portion of the hotel tax revenue
collected by the CITY at the rates and ~n the manner specified
here~n (such payments by the CITY to the ASSOCIATION sometimes
herein referred to as "the agreed payments" or "hotel tax funds").
1.2 Amount of Payments to Association.
(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 S351.002
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 ASSOCIATION an amount of money
equal to forty-four one hundredths of a percent (0.44%) of the base
payment amount for the period of October 1, 1997 through September
30, 1998 or Three Thousand Dollars ($3,000.00), whichever is less.
1.3 Dates of Payments to &ssooiation.
(a) The term "quarterly payments" shall mean payments by the
CITY to the ASSOCIATION of those amounts specified in ~1.2 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 ASSOCIATION the agreed payments
specified in ~1.2 above by quarterly payments paying forty-four one
hundredths of a percent (0.44%) 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 ad3usted so that the total of the quarterly
base payment amounts shall not exceed Three Thousand Dollars
($3,000) during the 1997-98 fiscal year. Each such quarterly
PAGE 2
payment shall be paid to the ASSOCIATION 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 responslblllty of the ASSOCIATION
(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 ASSOCIATION
2.1 Use of Funds. For and in consideration of the payment by the
CITY to the ASSOCIATION of the agreed payments of hotel tax funds
specified above, the ASSOCIATION 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 S 351.101(a).
2.2 Administrative Costs. The hotel tax funds received from the
CITY by the ASSOCIATION may be spent for day-to-day operations,
supplies, salaries, office rental, travel expenses, and other
administrative costs that are incurred directly in the performance
by the ASSOCIATION of those activities specified in 42 i above and
are allowed by TEX. TAX CODE § 351.101(f).
2.3 Specific Restrictions on Use of Funds.
(a) That portion of total admlnlstrat~ve costs of the
ASSOCIATION for which hotel tax funds may be used shall not exceed
that portion of the ASSOCIATION'S administrative costs actually
incurred in conducting the activities specified 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
]ob in an efficient and professional manner.
PAGE 3
~I~. RECORD KEEPING ~D REPORTING REQUIREMENTS
$.1 BUdqet.
(a) On or about September 1 and prior to the dlsbursement of
any funds for the 1997-98 fiscal year, the ASSOCIATION shall
prepare and submit to the City Manager of the CITY an annual budget
for such fiscal year for the ASSOCIATION and any other operation or
function of the ASSOCIATION in which the hotel tax funds shall be
used by the ASSOCIATION. This budget shall specifically identify
proposed expenditure of hotel tax funds by the ASSOCIATION. 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 ASSOCIATION 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 ~n writing by the Denton City Council
authorizing the expenditure of funds in such Section I.
(b) The ASSOCIATION acknowledges that the approval of such
budget,by the Denton city Council creates a f~duciary duty ~n the
ASSOCIATION with respect to the hotel tax funds paid by the CITY to
the ASSOCIATION under this Agreement. The ASSOCIATION 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 Separate Aoaounts. The ASSOCIATION shall maintain any hotel
tax funds paid to the ASSOCIATION by the CITY in a separate
account,
3,3 Fin&noi&l Reoords. The ASSOCIATION shall maintain complete
and accurate financial records of each expenditure of the hotel tax
funds made by the ASSOCIATION and, upon reasonably advance written
request of the Denton city Council or the C~ty's Assistant C~ty
Manager of Finance or h~s designee or other person, shall make such
financial records available for inspection and review by the Denton
C~ty COuncil or the City's Assistant city Manager of Finance or h~s
designee or other person.
3.4 QU&rterly Reports. Within thirty days after the end of every
quarter, the ASSOCIATION shall furnlsh to the CITY (1) a perfor-
mance report of the work performed under th~s 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. S 351.101(c) (Vernon 1994). The ASSOCIATION
shall 9romptly respond to any request from the City Manager of the
CITY for additional information relating to the activities
performed under th~s Agreement.
PAGE 4
3.5 Notioe of Meetings.~N shall give the City
Manager of the CITY ~ advance written notice of the time
and place of general meetings of the Denton Holiday Festival
Association, Inc. Board of Directors, as well as any other meeting
of any constituency of the ASSOCIATION at which this Agreement or
any matter the subject of this Agreement shall be considered. This
provision shall not he deemed to require the ASSOCIATION to give
notice of any executive session of the Executive Committee of the
ASSOCIATION.
IV. REIMBUR~F~ENT AND INDEMNIFICATION
4.1 Reimbursement of Assooiation for Administrative Costs. In the
event that this Agreement is terminated pursuant to Section 5.2(a),
the CITY agrees to reimburse the ASSOCIATION for any and all
expenses and costs undertaken by the ASSOCIATION in performance of
those activities specified in ~2.1 above or expenses or costs
incurred by the ASSOCIATION as described in ~2.2 above. The CITY
is obligated to reimburse the ASSOCIATION for expenses and costs as
described in ~2.2 above only for the period colm~encing 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 ASSOCIATION
during the one hundred eighty day period preceding termination or
the agreed payments otherwise due and payable to the ASSOCIATION
for such period.
4.2 Reimbursaent of ~ssooiation for Contractual Obligations. In
the event that this Agreement is terminated pursuant to Section
5.2(a), the CITY agrees to reimburse the ASSOCIATION for any and
all contractual obligations of the ASSOCIATION undertaken by the
ASSOCIATION 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 this Agreement. Notwithstanding any provision hereof to
the contrary, the obligation of the CITY to reimburse the ASSOCI-
ATION or to assume the performance of any contractual obligations
of the ASSOCIATION for or under any contract entered into by the
ASSOCIATION as contemplated herein shall not exceed FIVE HUNDRED
DOLLARS ($500.00). 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&~mant of Reimbursement to &ssooiation.
(a) With respect to expenses and costs incurred by the
ASSOCIATION for which the CITY is obligated to reimburse the
ASSOCIATION pursuant to ~4.1 above, the CITY shall pay such
PAGE 5
reimbursement amount due, if any, to the ASSOCIATION 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
ASSOCIATION for which the CITY is obligated to reimburse the
ASSOCIATION as provided in ~4.2 above, the CITY shall reimburse the
ASSOCIATION 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 ~4.2 above.
4.4 I~demnif~a&tion. The ASSOCIATION agrees to indemnify, hold
harmless, and defend the CITY, 1ts officers, agents, and employees
from and against any and all claims or suits for ln]ur~es, damage,
loss, or liability of whatever kind or character, arising out of or
in connection with the performance by the ASSOCIATION or those
services contemplated by this Agreement, ~ncludlng all such claims
or causes of action based upon common, constitutional or statutory
law, or based, in whole or in part, upon allegatlons of negligent
or Intentional acts of ASSOCIATION, its officers, employees,
agents, subcontractors, licensees and lnvltees.
V. TERM AND TERMINATION
5.1 Term. The term of this Agreement shall commence on October 1,
1997 and 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 e~ther 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 legal existence of the
ASSOCIATION;
(ii) The insolvency of the ASSOCIATION, the filing of a
petitlon in bankruptcy, either voluntarily or ~nvoluntarlly,
or an assignment by the ASSOCIATION for the benefit of
creditors;
PAGE 6
(iii) The continuation of a breach of any of the terms
or conditions of this Agreement by either the CITY or the
ASSOCIATION 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 ASSOCIATION to submit a finan-
cial 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 PROVI~ION~
6.X subcontract for Performance of Services. Nothing in this
Agreement shall prohibit, nor be construed to prohibit, the agree-
ment by the ASSOCIATION with another private entity, person, or
organization for the performance of those services described in
~2.1 above. In the event that the ASSOCIATION enters into any
arrangement, contractual or otherwise, with such other entity,
person or organization, the ASSOCIATION 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 Contraotor. The ASSOCIATION 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 ASSOCIATION shall have exclusive control of 1ts
operations and performance of services hereunder, and such persons,
entities, or organizations performing the same and the ASSOCIATION
shall be solely responsible for the acts and omissions of 1ts
directors, officers, employees, agents, and subcontractors. The
ASSOCIATION shall not be considered a partner or joint venturer
with the CITY, nor shall the ASSOCIATION be considered nor in any
manner hold itself out as an agent or official representative of
the CITY.
6.3 Assignment. The ASSOCIATION shall not assign this Agreement
without first obtaining the written consent of the CITY
6.4 Notioe. 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 mall, certified
mall, return receipt requested, or by hand-delivery, addressed to
the respective parties as follows:
PAGE 7
CITY ASSOCIATION
City Manager Chairman/Director
City of Denton Denton Holiday Festival
215 E. McKlnney Association, Inc.
Denton, TX 76201 P.O. Box 2765
Denton, TX 76202
Hand Delivery.
Argyle city Hall
506 N. Hwy. 377
Argyle, TX 76226
6.6 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 ASSOCIATION and their respective successors and
assigns.
6.6 Appl~oation of Laws. All 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 Exolus~ve ~graoment. This Agreement contains the entire
understanding and constitutes the entlre agreement between the
part~es 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 thls 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 Duplioata 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 designated.
PAGE 8
THE CITY OF DENTON, TEXAS
By: j~
ATTEST: APPROVED AS TO LEGAL FORM:
~IF~ WALTERS, HERBERT L. ' PROD'TY,
~TY S~CRETARY CITY ATTORNEY
DENTON HOLIDAY FESTIVAL
ASSOCIATION, INC.
ATTEST: APPROVED AS TO LEGAL FORM.
By: By:
SeCretary
As \HOLIDAY. K
PAGE 9
EFFECTIVE DATE
WHEREAS, on September 2, 1997, the Council of the C~ty of Denton, Texas passed
Ordinance numbers 97-243, 97-244, 97-245, 97-247, 97-248, 97-249, 97-250, 97-251, 97-252, 97-
253 and 97-254, (the "Approval Ordinances") approwng and authorizing funchng for certmn
contracts w~th a number of outside orgamzat~ons for F~scal Year ("FY") 97-98, pursuant to Chapter
351 of the Texas Tax Code, and
WHEREAS, each of the aforesmd contracts pmwded for post-performance reimbursement
of servmes rendered dunng each quarter of the fiscal year ~n the promotion of tourism, and
WHEREAS, ~n the future, the C~ty Council w~shes to award such momes on a quarterly
basra, ~n advance of performance, dunng each quarter of the calendar year, commencmg with
Calendar Year 1999, and
WHEREAS, as a result of the fomgomg, ~t wall be necessary to extend the term of the
ex,sting contracts for three months, m order to secure performance of these services 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 aforementioned Approval
Ordinances are hereby authorized by the C~ty of Denton to be extended under their exmt~ng terms
for a perlod 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 inconsistent w~th tlus Ordinance, such that all
duties set forth for performance prior to September 30, 1998 shall be performed by December 31,
1998, and such that no addmonal payment to the other part,es named m smd contracts for sermces
rendered during October, November and December 1998, shall be prod atler payment of the fourth
quarter payment already defined m the conmact
SECTION II That passage of flus ordinance constitutes a revocable offer of the Cxty of
Denton, Texas, wbach may be accepted by each of the other paCaes, e~ther by written confirmation,
or by performance of the dutxes set forth m the apphcable contracts dunng the extended term, after
delivery of a copy of ttus ordinance to the other partxes, m the manner estabhshed m paragraph 6 5
of each appheable contract
SECTION III That this ordinance shall become effectxve xmmed~ately upon its passage and
approvall
Page 1 of 2
JAC~fl'LLER, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
Page 2 of 2