1997-251NOTE Amended by Ordinance No. 98-295
ORDINANCE NO ~7-- ~-~/
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE GREATER DENTON ARTS COUNCIL 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 authonzed to execute an agreement between the
City of Denton and the Greater Denton Arts Council for the payment and use of hotel tax
revenue, under the terms and con&tions contmned m the agreement, a copy of which is attached
hereto and made a part hereof
SECTION II That this ordinance shall become effecttve immediately upon its passage
and approval
.^SS OAmO OV Othl z .ezCe/ e/
1997
JAC~J/LEP,, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE GREATER DENTON/%RTS COUNCIL (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 Greater Denton Arts
Council, a non-profit corporation incorporated under the laws of
the State of Texas (the "GDAC"):
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 S351.101 (a)(4) authorizes the CITY to
use revenue from its municipal hotel occupancy tax to promote
tourism and the convention and hotel industry for the encourage-
ment, promotion, improvement, and application of the arts,
including instrumental and vocal music, dance, drama, folk art,
creative writing, architecture, design and allied fields, painting,
sculpture, photography, graphic and craft arts, motion pictures,
radio, television, tape and sound recording, and other arts related
to the presentation, performance, execution, and exhibition of
these major art forms; and
WHEREAS, the GDAC is well equipped to perform those activi-
ties; and
wHEREAS' TEX. TAX CODE §351.101 (c) authorizes the CITY to
delegate by contract with the GDAC as a private organization 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
GDAC agree and contract as follows,
I. HOTEL TAX REVENUE PAYMENT TO GDAC
1.1 COnsideration. For and in consideration of the activities to
be performed by the GDAC under this Agreement, the CITY agrees to
pay to the GDAC 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 GDAC sometimes herein referred to as "the agreed
payments" or .hotel tax funds").
Lo2 ~ount o£ ~&~snts ~o GD~Co
(a) As used ~n this aqreement~ the following terms shall have
the fo~o~nq specific meanings:
(i) The "hotel tax revenue" shall mean the monies col-
lected and received by the CITY during any relevant period of
tame (i.e., fiscal year or fiscal quarter) as municipal hotel
occupancy tax at the rate of seven percent (7%) of the price
pa~d 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 (1.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 GDAC an amount of money equal to
fifteen percent (15.00%) of the base payment amount for the period
of Octgber 1, 1997 through September 30, 1998 or One Hundred One
Thousand, Seven Hundred Dollars ($101,700.00), whichever is less.
1.3 Dates of Payments to GDAC.
(a) The term ,,quarterly payments" shall mean payments by the
CITY to the GDAC 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 GDAC the agreed payments specified in
41.2 above by quarterly payments paying fifteen percent (15 00%) 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 One
Hundred One Thousand, Seven Hundred Dollars ($101,700 00) during
the 1997-98 fiscal year. Each such quarterly payment shall be paid
to the GDAC on or before the forty-fifth (45th) day after the last
day of such respective fiscal quarter for which such payment is
PAGE 2
due. If quarterly financial and performance reports are not
received within thirty (30) days of the end of the applicable
quarterl, then CITY may withhold the quarterly payment(s) until the
appropriate reports are received and approved.
(c) The funding of this project in no way commits the CITY to
future funding of this program beyond the current contract period.
Any future funding is solely the responsibility of the GDAC.
(d) It is expressly understood that this contract in no way
obligates the General Fund or any other monies or credits of the
CITY.
II. UBE OF HOTEL T~X REVENUE BY GDAC
2.1 USe of Funds. For and in consideration of the payment by the
CITY to the GDAC of the agreed payments of hotel tax funds
specified above, the GDAC agrees to use such hotel tax funds only
for the following purposes:
(a) advertising and conducting solicitations and promotional
programs to attract tourists and convention delegates or regis-
trants to the municipality or its vicinity;
(b) the encouragement, promotion, improvement, and applica-
tion of the arts, including instrumental and vocal music, dance,
drama, folk art, creative writing, architecture, design and allied
fields, painting, sculpture, photography, graphic and craft arts,
motionlpictures, radio, television, tape and sound recording, and
other arts related to the presentation, performance, execution, and
exhibl$ion of these major art forms; and
(c) 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
(il) 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 Administrative Costs.
(a) $90,106.00 of the hotel tax funds received from the CITY
by the GDAC 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 GDAC of
PAGE 3
those activities specified in 42.1 above and are allowed by TEX
TAX CODE S 351.101(f).
(b) $11,594.00 of the hotel tax funds received from the City
by GDAC shall be disbursed to fund grants for entitles producing
programs envisioned by 2.1(b) of this agreement and GDAC is
specifically required to disburse $5,000.00 of this sum for
programming to be produced by the Denton Community Theater. A
subgrantee shall:
(1) at least annually make periodic reports to the
governing body of its expenditures from the tax authorized by
this chapter; and
(2) make records of these expenditures available for
review to the governing body or other person.
2.3 Speoifio Restriotions on Use of Funds.
(a) That portion of total administrative costs of the GDAC
for which hotel tax funds may be used shall not exceed that portion
of the GDAC'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.
III. RECORD KEEPING /%ND REPORTING REQUIREMENT8
S.1 Budget.
(a) On or about September i and prior to the disbursement of
any funds for the 1997-98 fiscal year, the GDAC shall prepare and
submit to the City Manager of the CITY an annual budget for such
fiscal year for the GDAC and any other operation or function of the
GDAC in which the hotel tax funds shall be used by the GDAC. This
budget shall specifically identify proposed expenditure of hotel
tax funds by the GDAC 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
GDAC 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 GDAC acknowledges that the approval of such budget by
the Denton city Council creates a fiduciary duty in the GDAC with
respect to the hotel tax funds paid by the CITY to the GDAC under
PAGE 4
this Agreement. The GDAC 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 Aooounts. The GDAC shall maintain any hotel tax
funds paid to the GDAC by the CITY in a separate account.
3.3 Ftnanoial Reoords. The GDAC shall malntain complete and
accurate financial records of each expenditure of the hotel tax
funds made by the GDAC and, upon reasonably advance written request
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 Quarterly Reports. Within thirty days after the end of every
quarter, the GDAC 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 GDAC shall
promptly respond to any request from the City Manager of the CITY
for additional information relating to the activities performed
under this Agr~e~ ~
3.$ NOtioe/~ Mae~_~_ ·-~he ~AC shall glue the City Manager of~
the CITY~e~se4~m%~dvance written notice of the time and place of
general meetings of Greater Denton Arts Council Board of Directors
as well as any other meeting of any constituency of the GDAC at
which this Agreement or any matter the subject of this Agreement
shall be considered. This provision shall not be deemed to require
the GDAC to give notice of any executive session of the Executive
Committee of the GDAC.
IV. REIMBURSEMENT AND INDEMNIFICATION
4.1 Reimbursement of ~DAC for Administrative Costs. In the event
that this Agreement is terminated pursuant to Section 5.2(a), the
CITY agrees to reimburse the GDAC for any and all expenses and
costs undertaken by the GDAC in performance of those activities
specified in ~2.1 above or expenses or costs incurred by the GDAC
as described in ~2.2 above. The CITY Is obligated to reimburse the
GDAC 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 GDAC during the one hundred eighty day period
preceding termination or the agreed payments otherwise due and
payable to the GDAC for such period.
PAGE 5
4.2 Reimbursement of GDAO for Contraotual Oblig&tions. Iht he
event that this Agreement is terminated pursuant to Section 5.2(a),
the CIT~ agrees to reimburse the GDAC for any and all contractual
obligatlions of the GDAC undertaken by the GDAC 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 obliga-
tion of the CITY to reimburse the GDAC or to assume the performance
of any contractual obligations of the GDAC for or under any
contract entered into by the GDAC as contemplated herein shall not
exceed ~IVE THOUSAND DOLLARS ($5,000.00). Such monetary limitation
is cumulative of all contractual obllgatlons and shall not be
construed as a monetary limitation on a per contract basis.
4.3 Payment of Reimbursement to GD&C.
(a) With respect to expenses and costs incurred by the GDAC
for which the CITY is obligated to reimburse the GDAC pursuant to
~4.1 above, the CITY shall pay such reimbursement amount due, if
any, to the GDAC on or before the forty-fifth (45th) day after the
date of termination of this Agreement.
(b) With respect to contractual obl~gatlons undertaken by the
GDAC for which the CITY is obligated to reimburse the GDAC as
provided in ~4.2 above, the CITY shall relmburse the GDAC for such
monetary obligations required in such contractual obligation in
such a~ounts 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~e~ifioation. The GDAC 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 GDAC or those services
contemplated by this Agreement, including all such claims or causes
of action based upon co,on, constitutional or statutory law, or
based, in whole or in part, upon allegations of negligent or
intentional acts of GDAC, its officers, employees, agents,
subcontractors, licensees and lnvitees.
4.5 I~suranoe. The GDAC shall provide insurance as follows:
$500,000 Commercial General Liability
Statutory Workers' Compensation and Employers' Liability
($250,00015500,00015250,000)
$500,000 Business Automobile Liability
PAGE 6
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/%ND 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.
$.~ Termination.
(a) This Agreement may be terminated by either party by
giving the other party one hundred eighty (180) days advance
written not~ce.
(b) This Agreement shall automatically terminate upon the
occurrence of any of the following events.
(i) The termination of the corporate existence of the
GDAC;
(ii) The insolvency of the GDAC, the f~llng of a
petition in bankruptcy, either voluntarily or Involuntarily,
or an assignment by the GDAC for the benefit of creditors;
(1ii) The continuation of a breach of any of the terms
or conditions of this Agreement by either the CITY or the GDAC
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 GDAC 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. GENERAL PROVISIONS
6.1 Subaontraot for Performanoe of Servioes. Nothing in th~s
Agreement shall prohibit, nor be construed to prohibit, the agree-
ment by the GDAC with another private entity, person, or organi-
zation for the performance of those services described in 42.1
above. In the event that the GDAC enters into any arrangement,
contractual or otherwise, with such other entity, person or organi-
zation, the GDAC 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.
PAGE 7
6.2 Independent Contraator. The GDAC 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 GDAC shall have exclusive control of 1ts
operations and performance of services hereunder, and such persons,
entities, or organizations performing the same and the GDAC shall
be solely responsible for the acts and omissions of its directors,
officers, employees, agents, and subcontractors. The GDAC shall
not be considered a partner or Joint venturer with the CITY, nor
shall the GDAC be considered nor in any manner hold itself out as
an agent or official representative of the CITY.
6.3 Assig~ent. The GDAC shall not assign this Agreement without
first obtaining the written consent of the CITY.
6.4 Natioe. Any notice required to be given under this Agreement
or any statute, ordinance, or regulation, shall be effective when
given an 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 GDAC
city Manager Executive Director
city of Denton Greater Denton Arts Council
215 E. McKinney 207 S. Bell
Denton, TX 76201-4299 Denton, TX 76201
6.$ Inurement. This Agreement and each provision hereof, and each
and every right, duty, obligation, and l~abllity set forth herein
shall be binding upon and inure to the benefit and obligation of
the CITY and the GDAC and their respective successors and assigns
6.6 Application 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.? E~clusive 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-
standiDgs, 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-
ditlo~s 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 Duplicate originals. This Agreement is executed in duplicate
originals.
PAGE 8
6.9 He~ingS. 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 design~t~d~
THE CITY OF DENTON, TEXAS
By: ~ JA
ATTEST: APPROVED AS TO LEGAL FORM:/
HE~B'ERT L' PROUTY,
NNIF~R WALTERS,
TY S~CRETARY CITY ATTORNEY
GREATER DENTON ARTS COUNCIL
President
ATTEST: APPROVED AS TO LEGAL FORM:
Sed~e~ary
A \GDAC. K
PAGE 9
ORDINANCE NO
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
EFFECTWE DATE
WHEREAS, on September 2, 1997, the Council of the City 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 anthonzmg funding for certain
contracts w~th a number of outside orgamzatluns for F~scal Year ("FY") 97-98, pursuant to Chapter
351 of the Texas Tax Code, and
WHEREAS, each of the aforesaid contracts provided for post-performance reimbursement
of services rendered dtmng each quarter of the fiscal year in the promotion of tourism, and
WHEREAS, m the future, the City Council wishes to award such montes on a quarterly
basis, in advance of performance, dunng each quarter of the calendar year, commencing with
Calendar Year 1999, and
WHEREAS, as a result of the foregoing, it will be necessary to extend the term of the
existing contracts for three months, in 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 anthonzed by the City 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
modified upon acceptance to the extent that they are inconsistent with flus 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 additional payment to the other parties named m said contracts for semces
rendered during October, November and December 1998, shall be paid aRer payment of the fourth
quarter payment already defined m the contract
SECTION li That passage of flus ordinance consntutes a revocable offer of the City of
Denton, ~exas, Much may be accepted by each of the other pames, either by written confirmation,
or by performance of the duties set forth m the applicable contracts during the extended term, a~er
delivery of a copy of flus ordinance to the other parties, in the manner established m paragraph 6 5
of each apphcable contract
SECTION III That flus ordinance shall become effective immediately upon its passage and
approval
Page 1 of 2
PASSED AND APPROVED this the /.5/ --day of ,1998
JAC~I~LL~R, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
/,
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