1997-253NOTE Amended by Ordinance No. 98-295
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE SCHOLARS PHAIR 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
~ That the Mayor is hereby authorized to execute an agreement between the
City of Denton and the Scholars Phalr Foundation, Inc for the payment and use of hotel tax
revenue, under the terms and conditions contained m the agreement, a copy of which ~s attached
hereto and made a part hereof
~ That this ordinance shall become effective immediately upon its passage
and approval
1997
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
AGRESMEHT BETWEEN THE CITY OF DEIq~ON ARD
THE SOHOLi~.H ~I~ZR FOU~DATZOHv ZRC, (97-98)
~ROVZDZNG FOR THE ~AYXENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a muni-
cipal corporation (the "CITY"), and the Scholars Phalr Foundation,
Inc., a legal entity existing under the laws of the State of Texas
(the ,,FOUNDATION"):
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 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 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
FOUNDATION agree and contract as follows;
I. HOTEL TAX REVENUE PAYMENT TO FOUNDATION
1.~ Consideration. 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
at the rates and in the manner specified
collected by the CITY
herein (such payments by the CITY to the FOUNDATION sometimes
herein referred to as "the agreed payments" or ,'hotel tax funds").
1.2 Amount o£ payments to Foundation.
(a) As used in thls 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.
(il) 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 perlod of time (1 e. fiscal year or
fiscal quarter), less (1) such amounts ~ncurred 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 pa~d
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 ~n litigation against or auditing
of such taxpayers.
(b) The CITY shall pay to FOUNDATION an amount of money equal
to one and forty-seven one hundredths of a percent (1.47%) of the
base payment amount for the period of October 1, 1997 through
September 30, 1998 or Ten Thousand Dollars ($10,000.00), whichever
is less.
1.3 Dates of Payments to Foundation.
(a) The term "quarterly payments" shall mean payments by the
CITY to the FOUNDATION of those amounts specified in 91.2 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 91.2 above by quarterly payments paying one and forty-
seven one hundredths of a percent (1.47%) 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 Ten Thousand
PAGE 2
Dollars ($10,000) during the 1997-98 fiscal year. Each such
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 w~thln thirty (30) days of the
end of the applicable quarter, then CITY may withhold the quarterly
payment(s) until the appropriate reports are recelved and approved.
(c) The funding of this pro3ect 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. USE OF HOTEL TAX REVENUE BY FOUNDATION
2.1 Use 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).
Z.Z A~ministrative 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 ~n ~2.1 above and are
allowed by TEX. TAX CODE § 351.101(f).
2.3 Speoifio Restri~tions on Use 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 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 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
III. RECORD KEEPING ~ND REPORTING REQUIREMENTS
3.~ Bu~ge~,
(a) On or about September 1 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 FOI/NDATION 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 separate Aooounts. The FOUNDATION shall maintain any hotel
tax funds paid to the FOUNDATION by the CITY in a separate account
3.3 Finenoi&l Reoorde. 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 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~&rterly Reports. Within 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. S 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
3.5 Notioe of/Me~'~e.TheFOUNDATION shall give the City Manager
of the CITY~ advance written notice of the time and place
of general meetings'of the Scholars ~halr ~oundatlon?.~nc. Boasd~
Directors, as well as any other mee=lng or any const~=uency
FOUNDATION at which this Agreement or any matter the subject of
this Agreement shall be considered. This provision shall not be
deemed .to require the FOUNDATION to give notice of any executive
session of the Executive Committee of the FOUNDATION.
IV. REIMBURSEMENT ~%ND INDEItNIFICATION
4.L Rsi~bursemsnt of Assooietion £or Administrative Costs. 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
expenses and costs undertaken by the FOUNDATION in performance of
those activities specified ~n 42.1 above or expenses or costs
incurred by the FOUNDATION as described in 42.2 above. The CITY is
obligated to reimburse the FOUNDATION for expenses and costs as
described in 42.2 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 FOUNDATION
during the one hundred eighty day period preceding termination or
the agreed payments otherwise due and payable to the FOUNDATION for
such period.
4.2 Reimbursement 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 42.1
above, conditioned upon such contractual obligations having been
incurred and entered into in the good faith performance of those
services contemplated in 42.1 above, and further conditioned upon
such contractual obligations having a term not exceeding the full
term of this Agreement. Notwithstandlng 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 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 ~&~nsnt of Reimbursement to Foundation.
(a) With respect to expenses and costs incurred by the
FOUNDATION for which the CITY ~s obligated to reimburse the
FOUNDATION pursuant to 44.1 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 inde~ifioation. 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]urges, 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, ~ts officers, employees, agents,
subcontractors, licensees and lnvitees.
V. TIRM~%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.
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:
(1) The termination of the legal existence of the
FOUNDATION;
(ii) The insolvency of the FOUNDATION, the f~llng of a
petition in bankruptcy, either voluntarily or ~nvoluntarlly,
or an assignment by the FOUNDATION for the benefit of credi-
tors;
PAGE 6
(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 PROVI~ION~
6.1 subcontract for Perform&noe 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
¶2.1 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
pertainLng to expenditure of the agreed payments and hotel tax
funds.
6.2 I~depe~de~t Ccitt&croN. 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,
entitles, or organizations performing the same and the FOUNDATION
shall be solely responsible for the acts and omissions of ~ts
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 Assig~me~t. The FOUNDATION shall not assign th~s Agreement
without first obtaining the written consent of the CITY.
6.4 Notiae. 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
mail, return receipt requested, or by hand-delivery, addressed to
the respective parties as follows:
PAGE 7
city Manager Chairman/Director
city of Denton Scholars Phalr Foundation, Inc.
215 E. McKinney 210 S. Elm, Suite A
Denton, TX 76201-4299 Denton, TX 76201
6.$ Inurement. This Agreement and each provision hereof, and each
and every right, duty, obligation, and llabll~ty 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 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 ~x~lusive ~greement. 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-
standlngs, oral or wrltten, express or implied, between or among
the parties hereto, relating to the subject matter of this agree-
ment, which are not fully expressed here~n. The terms and con-
ditions 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 ~s executed ~n duplicate
orlginals.
6.9 Headings. The headings and subheadings of the various sec-
t~ons and paragraphs of this Agreement are inserted merely for the
purpose of convenience and do not express or ~mply any l~m~tatlon,
definition, or extension of the specific terms of the section and
paragraph so deslgnated.
THE CITY OF DENTON, TEXAS
JACk/MILLER, MAYOR
PAGE 8
ATTEST: APPROVED AS TO LEGAL FORM'
~/T~ALTERS, RERBERT L. PROUTY,
C~TY SECRETARY CITY ATTORNEY
SCHOLARS PHAIR FOUNDATION, INC.
By: ~
ATTEST: APPROVED AS TO LEGAL FORM:
By: By:
Secretary
A \SCHOLARS K
PAGE 9
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 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") approving and authonzmg funding for certain
contracts with a number of outside orgamzatlons for Fiscal Year ("FY") 97-98, pursuant to Chapter
351 of the Texas Tax Code, and
WHEREAS, each of the aforesmd contracts provided for post-performance reimbursement
of services rendered dunng each quarter of the fiscal year in the promotion of tourism, and
WHEREAS, in the future, the City Council wishes to award such momes 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, 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 City of Denton to be extended under their existing terms
for a period of three months, except that paragraphs I 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 part~es named in smd contracts for services
rendered during October, November and December 1998, shall be prod after payment of the fourth
quarter payment already defined in the contract
SECTION II That passage of tins ordinance constitutes a revocable offer of the City of
Denton, Texas, which may be accepted by each of the other parties, either by wntten confirmation,
or by performance of the duties set forth tn the apphcable contracts dunng the extended term, at~er
delivery of a copy of tlus ordinance to the other parties, in the manner established in paragraph 6 5
of each apphcable contract
SECTION III That flus ordinance shall become effective ~mmethately upon its passage and
approval
Page 1 of 2
PASSED AND APPROVED this the /.52 --day of ,1998
JAC~R, MAYOR
ATTEST'
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
Page 2 of 2