1996-198T \WPDOCS\ORD\~MPHITAX 0RD
ORDINANCE NO q~-[~?
A ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN
THE CITY OF DENTON AND THE DENTON COUNTY AMPHITHEATER ASSOCIATION
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 County
Amphztheater Assoc~atzon for the payment and use of hotel tax
revenue, under the terms and condltzons contained in the agreement,
a copy of which zs attached hereto and made a part hereof
SECTION II That thzs ordznance shall become effectzve
zmmedlately upon zts passage and approval
PASSED AND APPROVED this the Iq~c' day of~, 1996
JAC~
ATTEST
JENNIFER WALTERS, CITY SECRETARY
O'"7
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
AGREEMENT BETWEEN THE CZTY OF DENTON AND
THE DENTON COUNTY AMPNZTHBATRE ASSOCZATZON, INC. (96-97)
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 County Amphitheatre
Association, Inc., a legal entity existing under the laws of the
State of Texas (the "ASSOCIATION"):
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 conslderatlon paid by a hotel
occupant; and
WHEREAS, by Ordinance 86-67, the CITY has provided for the
assessment 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)(3) 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 munici-
pality 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;
HOTEL T~E REVENUE PAYMENT TO ASSOCIATION
1.1 Conel4eration. For and in consideration of the activities 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 in the manner specified
herein (such payments by the CITY to the ASSOCIATION sometimes
herein referred to as "the agreed payments" or "hotel tax funds").
~.~ ~t~ount of ~a~ents to &ssooiation.
(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 §3§1.002
and City Ordinance 86-87, 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 Three
Thousand Dollars ($3,000).
(b) The CITY shall pay to ASSOCIATION an amount of money
equal to the base payment amount for the period of October 1, 1996,
through September 30, 1997.
1.3 Dates of Payments to Assooiation.
(a) The term "quarterly payments" shall mean payments by the
CITY to the ASSOCIATION of four (4) payments totalling the amount
specified in 41.2.
(b) CITY shall pay the ASSOCIATION quarterly payments of
Seven Hundred Fifty Dollars ($750). Each such quarterly payment
shall be paid to the ASSOCIATION on or before the forty-fifth
(4§th) day after the last day of such respective fiscal quarter for
which,such payment is due. If quarterly f~nancial and performance
reports are not received within thirty (30) days of the end of the
applicablequarter, 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 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.
PAGE 2
IIo USE OF HOTEL T~ 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 § 3§1.101(a)(3).
2.2 A~ministrative 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 ~n 92.1 above and
are allowed by TEX. TAX CODE § 351 101(f).
2.3 Specific Restrictions on Use of Funds.
(a) That portion of total administrative 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 92.1 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.
III. RECORD KEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
(a) On or about September 1 and prior to the disbursement of
any funds for the 1996-97 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 in writing by the Denton City Council
authorizing the expenditure of funds in such Section I.
PAGE 3
(b) The ASSOCIATION acknowledges that the approval of such
budget by the Denton City Council creates a fiduciary duty in 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 § 3§1.101(a) TEX. TAX CODE and in the budget as approved by the
CITY.
3.2 8ap&rata Accounts. The ASSOCIATION shall maintain any hotel
tax funds paid to the ASSOCIATION by the CITY in a separate
account.
3.3 Pinane~al Records. 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 Clty's~Executive Director
of Finance or his designee, shall make such financial records
available for inspection and review by the Denton City Council or
the City's Executive Director of Finance or his designee.
3.4 Quarterly Reports. Within thirty days after the end of every
quarter, the ASSOCIATION shall furnish to the CITY (1) a perfor-
mance 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 ASSOCIATION
shall promptly respond to any request from the City Manager of the
CITY for additional information relating to the activities
performed under this Agreement.
3.S Notice of Meetings. The ASSOCIATION shall give the City
Manager of the CITY reasonable advance written notice of the time
and place of general meetings of the Denton County Amphitheatre
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 be deemed to require the ASSOCIATION to give
notice of any executive session of the Executive Committee of the
ASSOCIATION.
IV. REIMBURSEMENT AND INDEMNIFICATION
4.1 Reimbursement of Association for A4ministrative 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 42.1 above or expenses or costs
incurred by the ASSOCIATION as described in 42.2 above. The CITY
is obligated to reimburse the ASSOCIATION for expenses and costs as
PAGE 4
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 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 Reimbursement of Association for Contractual Oblig&tions. 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 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. 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 Payment of Reimbursement to Association.
(a) With respect to expenses and costs incurred by the
ASSOCIATION for which the CITY is obligated to reimburse the
ASSOCIATION pursuant to 44.1 above, the CITY shall pay such
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 44.2 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 44.2 above.
4.4 Inde~mifio&tion. The ASSOCIATION 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 ASSOCIATION or those
services contemplated by this Agreement, Including all such claims
or causes of action based upon common, constitutional or statutory
PAGE 5
law, or based, in whole or in part, upon allegations of negligent
or intentional acts of ASSOCIATION, its officers, employees,
agents, subcontractors, licensees and invitees.
V. TERM AND TERMINATION
5.1 Ter~. The term of this Agreement shall commence on October 1,
1996 and terminate at midnight on September 30, 1997. 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 legal existence of the
ASSOCIATION~
(li) The insolvency of the ASSOCIATION, the filing of a
petition in bankruptcy, either voluntarily or involuntarily,
or and assignment by the ASSOCIATION for the benefit of
creditorsl
(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 partyl 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. ~ENERAL PROVISIONS
6.1 Suboontraot for Performanos of Servioes. Nothing ~n th~s
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
72.1 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
entlty, 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,
PAGE 6
separate funds maintenance, and limitations and prohibitions
pertaining to expenditure of the agreed payments and hotel tax
funds.
6.2 Independent Contractor. 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 its
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 its
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 Assig~snt. The ASSOCIATION shall not assign this Agreement
without first obtaining the written consent of the CITY.
6.4 Not,es. 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:
CITY ASSOCIATION
City Manager Chairman/D~rector
City of Denton Denton County ;tmphitheatre
215 E. McKinney Association, Inc.
Denton, TX 76201 910 Whitney ct.
Denton, TX 76205
6.5 Inurement. ThlsAgreement 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 ~ppliaet~on 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 BxolusiVe Agreement. Th~s 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-
PAGE 7
ment, which are not fully expressed herein. The terms and con-
ditlons of this Agreement shall prevail notwithstanding any
variance in thls Agreement from the terms and conditions of any
other document relating to this transaction or these transactions
6.8 Duplio&te Orig~nals. This Agreement is executed in duplicate
originals.
6.9 He&dings. The headings and subheadings of the various sec-
tions 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.
THE CITY OF DENTON, TEXAS
By: ~
JACK
ATTEST: APPROVED AS TO LEGAL FORM:
HERBERT L. ~ROUTY,
NIF~IRWALTERS,
Y SBCRETARY CITY ATTORNEY
DENTON COUNTY AMPHITHEATRE
ASSOCIATION, INC.
~hal~a~/Directof ~
ATTEST: APPROVED AS TO LEGAL FORM:
By: By:
Secretary
T \NPD~S\K~$S~IATI~ K
PAGE 8