1995-064E:\WPDOCS~ORD\FOUND.HOT
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN
THE CITY OF DENTON AND THE DENTON COUNTY HISTORICAL FOUNDATION 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
Historical Foundation for the payment and use of hotel tax revenue,
under the terms and conditions contained in the agreement, a copy
of which is attached hereto and made a part hereof.
SECTION II. That this ordinance shall become effective immed-
iately upon its passage and approval.
PASSED AND APPROVED this the~/~ day of~~.~__, 1995.
BOB'CASTLEBERRY, MA~ ~
ATTEST:
JENNIFER W~uLTERS, CITY SECRETARY
APPk~JVED AS TO LEGAL FORM:
MICHAEL A. BUCEK, ACTING CITY ATTORNEY
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON COUNTY HISTORICAL FOUNDATION
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 Historical
Foundation, a non-profit corporation incorporated 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 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) (5) authorizes the CITY to
use revenue from its municipal hotel occupancy tax to promote
tourism and the convention and hotel industry by performing
historical restoration and preservation projects or activities or
advertising and conducting solicitations and promotional programs
to encourage tourists and convention delegates to visit preserved
historic sites or museums at or in the immediate vicinity of
convention center facilities, or located elsewhere in the munici-
pality or its vicinity that would be frequented by tourists,
convention delegates, or other visitors to the municipality; 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 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
FOUNDATION agree and contract as follows;
I. HOTEL TAX REVENUE PAYMENT TO FOUNDATION
1.1 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
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").
1.2 Amount of Payments to 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 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 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 one and sixty-three one hundredths of a percent (1.63%) of the
base payment amount for the period of October 1, 1994, through
September 30, 1995 or Eight Thousand Two Hundred Eight Dollars
($8,208.00), 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 ¶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 FOUNDATION the agreed payments speci-
fied in ¶1.2 above by quarterly payments paying one and sixty-three
one hundredths of a percent (1.63%) of the base payment amount
(quarterly) for the first three quarters of 94-95 and the percent-
age of the base payment amount for the last quarter shall be ad-
justed so that the total of the quarterly base payment amounts
shall not exceed Eight Thousand Two Hundred Eight Dollars
($8,208.00). 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 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.
PAGE 2
(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. 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 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; and
(b) 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
(ii) 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) (2)-(5).
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 ¶2.1 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
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 ~ REPORTING REQUIREMENTS
3.1 Budget.
(a) On or before July 31st of each calendar year during the
term of this Agreement, the FOUNDATION shall prepare and submit to
the City Manager of the CITY an annual budget for the next ensuing
fiscal year of this Agreement 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 specifi-
cally 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 agreed payments or hotel tax funds during any fiscal
year of this Agreement unless such budget for such respective
fiscal year has been approved in writing by the Denton City
Council.
(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 Separate Accounts. The FOUNDATION shall maintain any hotel
tax funds paid to the FOUNDATION by the CITY in a separate account.
3.3 Financial 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 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 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 A/qN. § 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.
3.5 Notice of Meetings. The FOUNDATION shall give the City Manager
of the CITY reasonable advance written notice of the time and place
of general meetings of the Denton County Historical Foundation
Board of Directors as well as any other meeting of any constituency
PAGE 4
of the 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 AND iNDEMNIFICATION
4.1 Reimbursement of Foundation for 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 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
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 ObliHations. ·
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, 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 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 Payment of Reimbursement to Foundation.
(a) 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
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 ¶4.2 above, the CITY shall reimburse the
FOUNDATION for such monetary obligations required in such contrac-
PAGE 5
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 Indemnification. 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 injuries, 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.
V. TERM AND TERMINATION
5.1 Term. The term of this Agreement shall be for one-half year,
commencing April 1, 1995 and terminating at midnight on September
30, 1995. This term shall be a period of six (6) months.
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 corporate existence of the
FOUNDATION;
(ii) The insolvency of the POUNDATION, the filing of a
petition in bankruptcy, either voluntarily or involuntarily,
or and assignment by the FOUNDATION for the benefit of
creditors;
(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 recording procedures required
herein and generally accepted accounting principles prior to
the beginning of the next contract term.
VI. GENERAL PROVISIONS
6.1 Subcontract for Performance of Services. Nothing in this
Agreement shall prohibit, nor be construed to prohibit, the agree-
PAGE 6
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
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 Assignment. The FOUNDATION shall not assign this Agreement
without first obtaining the written consent of the CITY.
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
mail, return receipt requested, or by hand-delivery, addressed to
the respective parties as follows:
CITY FOUNDATION
City Manager Chair, Board of Trustees
City of Denton Denton County Historical Foundation
215 E. McKinney P.O. Box 2184
Denton, TX 76201 Denton, TX 76202
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 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.
6.7 Exclusive Agreement. This Agreement contains the entire
understanding and constitutes the entire agreement between the
PAGE 7
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-
ment, which are not fully expressed herein. 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 Duplicate Originals. This Agreement is executed in duplicate
originals.
6.9 Headings. 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
~NNIF;~ WALTERS, MICHAEL A. BUCEK,
~ITY ~CRETARY ACTING CITY ATTORNEY
DENTON COUNTY HISTORICAL FOUNDATION
Chair, Board of Trustees
ATTEST: APPROVED AS TO LEGAL FORM:
By: By:
Secretary
E: \ WPDOCS ~ K\ FOUNDAT I ON. K
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