1990-042ORDINANCE NO. 7 Q '00~~
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN
THE CITY OF DENTON AND THE DENTON COUNTY HISTORICAL MUSEUM 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 Museum 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 the City Council hereby authorizes the
expenditure of funds as set forth in the agreement.
SECTION III. That this ordinance shall become effective
immediately upon its passage and approval. I. ,
PASSED AND APPROVED this th &day of A414-~- 1990.
L~ 0
RAY ST E, , MA R
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
r
BY: j0tA M It 11 2&Z
APPR D AS O LEGAL FORM:
DEBRA ADAMIDRAY(OVITCHH,, /CITY ATTORNEY
BY : ZlIx-aj VI Y cwt ~L ( Gl~
DCHM.ord
1 q 7
2927L
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON COUNTY HISTORICAL MUSEUM
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
Museum, a non-profit corporation incorporated under the laws of
the State of Texas (the "Museum
WHEREAS, TEX. TAX CODE §351.002 authorizes the City to levy by
ordinance a municipal hotel occupancy tax ("hotel tax") not ex-
ceeding 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 his-
torical 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 con-
vention center facilities, or located elsewhere in the municipality
or its vicinity that would be frequented by tourists, convention
delegates, or other visitors to the municipality; and
WHEREAS, the Museum 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 Museum 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
Museum agree and contract as follows:
I. HOTEL TAX REVENUE PAYMENT TO MUSEUM
1.1 Consideration. For and in consideration of the activities
to be performed by the Museum under this Agreement, the City
agrees to pay to the Museum 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 Museum sometimes herein
referred to as "the agreed payments" or "hotel tax funds").
1.2 Amount of Payments to Museum.
(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, fiscal quarter, or
calendar month) 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 eighty-eight hundredths
(88/100ths) of one seventh (1/7th) of the total hotel
tax revenue collected by the City during any relevant
period of time (i.e. fiscal year, fiscal quarter, or
calendar month), less (1) such amounts incurred
during such relevant period of time for costs of col-
lection of hotel taxes from taxpayers or auditing tax-
payers for tax payment compliance, such collection and
auditing costs to include fees paid to attorneys or
other 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.
(iii) In the event that the municipal hotel occupancy
tax rate is reduced from the current rate of 7% to 6%,
the term "base payment amount" shall be deemed to mean
an amount of money equal to eighty-eight hundredths
(88/100ths) of one sixth (1/6th) of the total hotel
tax revenue, as defined above, collected by the City
during any relevant period of time (i.e. fiscal year,
fiscal quarter, or calendar month), 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 compliance, such
collection and auditing costs to include fees paid to
attorneys or other agents not in the regular employ of
PAGE 2
the City and which attorneys or agents effect collec-
tion 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 the Museum an amount of money
equal to one hundred percent (100%) of the base payment amount
for the period April 1, 1990 until September 30, 1990.
(c) The City shall pay to the Museum an amount of money
equal to ninety eight percent (98%) of the base payment amount
for the first (1st) full fiscal year of this contract, such fiscal
year being October 1, 1990 to September 30, 1991.
(d) The City shall pay to the Museum an amount of money
equal to ninety five percent (95%) of the base payment amount for
the second, third, and fourth (2nd, 3rd, and 4th) full fiscal
years of this contract, such fiscal years being October 1, 1991
to September 30, 1992, October 1, 1992 to September 30, 1993, and
October 1, 1993 to September 30, 1994 and for the period from
September 30, 1994 to March 31, 1995.
1.3 Dates of Payments to Museum.
(a) The term "quarterly payments" shall mean payments by
the City to the Museum of those amounts specified in 41.2 above
as determined by the hotel tax revenue collected by the City dur-
ing any one fiscal quarter during the term of this Agreement. The
term 'monthly payments" shall mean payments by the City to the
Museum of those amounts specified in 41.2 above as determined by
the hotel tax revenue collected by the City during any one calen-
dar month during the term of this Agreement.
(b) City shall pay the Museum the agreed payments speci-
fied in 41.2 above quarterly. Each such quarterly payment shall
be paid to the Museum on or before the forty-fifth (45th) day
after the last day of such respective fiscal quarter for which
such payment is due.
(c) Should the City, by amendment to the Code of Ordi-
nances of the City of Denton, require that the hotel tax be paid
on a monthly basis, the agreed payments by the City to the Museum
specified in 41.2 above shall be paid monthly. Each such monthly
payment shall be paid to the Museum on or before the forty-fifth
(45th) day after the last day of such respective calendar month
for which such payment is due.
II. USE OF HOTEL TAX REVENUE BY MUSEUM
2.1 Use of Funds. For and in consideration of the payment by
the City to the Museum of the agreed payments of hotel tax funds
PAGE 3
specified above, the Museum agrees to use such hotel tax funds
only for the purpose of 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
located in the City of Denton or its vicinity that would be fre-
quented by tourists, convention delegates, or other visitors to
the City of Denton, as authorized by TEX. TAX CODE 4351.101
(a)(5).
2.2 Administrative Costs. The hotel tax funds received from
the City by the Museum may be spent for day-to-day operations,
supplies, salaries, office rental, travel expenses, and other
administrative costs that are incurred directly in the perfor-
mance by the Museum of those activities specified in 42.1 above.
2.3 Specific Restrictions on Use of Funds.
(a) That portion of total administrative costs of the
Museum for which hotel tax funds may be used shall not exceed
that portion of the Museum's administrative costs actually in-
curred 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 job in an efficient and professional manner.
III. RECORD KEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
(a) On or before July 31st of each calendar year during
the term of this Agreement, the Museum 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 Museum. The City
shall not pay to the Museum 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 Museum acknowledges that the approval of such
budget by the Denton City Council creates a fiduciary duty in the
Museum with respect to the hotel tax funds paid by the City to
the Museum under this Agreement. The Museum shall expend hotel
tax funds only in the manner and for the purposes specified in
the budget as approved by the City.
PAGE 4
4.2 Reimbursement of Museum for Contractual Obligations. In
the event that this Agreement is terminated pursuant to Section
5.2(a), the City agrees to reimburse the Museum for any and all
contractual obligations of the Museum undertaken by the Museum in
performance of those activities specified in 42.1 above, condi-
tioned upon such contractual obligations having been incurred and
entered into in the good faith performance of those activities
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 Museum for
or under any contractual obligations of the Museum for or under
any contract entered into by the Museum as contemplated herein
shall not exceed TWO THOUSAND DOLLARS ($2,000.00). 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 Museum.
(a) With respect to expenses and costs incurred by the
Museum for which the City is obligated to reimburse the Museum
pursuant to 44.1 above, the City shall pay such reimbursement
amount due, if any, to the Museum on or before the forty-fifth
(45th) day after the date of termination of this Agreement. Ta-
(b) With respect to contractual obligations undertaken by
the Museum for which the City is obligated to reimburse the
Museum MW as provided in 44.2 above, the City shall reimburse
the Museum for such monetary obligations required in such con-
tractual obligation in such amounts and at those times such con-
tractual costs and expenses are due and payable according to the
terms of such contract limitation set forth in 44.2 above.
4.4 Indemnification. The Museum 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 Museum of 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 Museum, its officers, employees, agents,
subcontractors, licensees and invitees.
PAGE 6
V. TERM AND TERMINATION
5.1 Term. The term of this Agreement shall be for five (5)
years, commencing April 1, 1990 and terminating at midnight on
March 31, 1995. This term shall be comprised of an initial
period of six (6) months and subsequent four (4) fiscal years,
each fiscal year constituting the period from October 1 of a
calendar year to the next ensuing September 30, and a final
period of six months ending on March 31, 1995.
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 Museum;
(ii) The insolvency of the Museum, the filing
of a petition in bankruptcy, either vol-
untarily or involuntarily, or an assign-
ment by the Museum for the benefit of
creditors; or
(iii) The continuation of a breach of any of
the terms or conditions of this Agreement
by either the City or the Museum for more
than thirty (30) days after written notice
of such breach is given to the breaching
party by the other party.
VI. GENERAL PROVISIONS
6.1 Subcontract for Performance of Services. Nothing in this
Agreement shall prohibit, nor be construed to prohibit, the
agreement by the Museum with another private entity, person, or
organization for the performance of those services described in
tt2.1 above. In the event that the Museum enters into any ar-
rangement, contractual or otherwise, with such entity, person or
organization, the Museum 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 TEX. TAX
CODE Chap. 351, including reporting requirements, separate funds
maintenance, and limitations and prohibitions pertaining to ex-
penditure of the agreed payments and hotel tax funds.
6.2 Independent Contractor. The Museum shall operate as an
PAGE 7
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 Museum shall have exclusive control of its
operations and performance of services hereunder, and such per-
sons, entities, or organizations performing the same and the
Museum shall be solely responsible for the acts and omissions of
its directors, officers, employees, agents, and subcontractors.
The Museum shall not be considered a partner or joint venturer
with the City, nor shall the Museum be considered nor in any
manner hold itself out as an agent or official representative of
the City.
6.3 Assignment. The Museum 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, addressed
to the respective parties as follows:
City
City Manager
City of Denton
215 E. McKinney
Denton, TX 76201
Museum
Chair, Board of Trustees
Denton County Historical Museum
110 W. Hickory
Denton, TX 76201
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 obli-
gation of the City and the Museum and their respective successors
and assigns.
6.6 Application of Laws. All terms, conditions, and provi-
sions of this Agreement are subject to all applicable federal
laws, state laws, the Charter of the City of Denton, all ordi-
nances 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
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 condi-
tions 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.
PAGE 8
6.8 Duplicate Originals. This Agreement is executed in
duplicate originals.
6.9 Headings. The headings and subheadings of the various
sections and paragraphs of this Agreement are inserted merely for
the purpose of convenience and do not express or imply any limi-
tation, definition, or extension of the specific terms of the
section and paragraph so designated.
EXECUTED thisy day of ~n~~..., , 1990.
THE CITY OF DENTON, TEXAS
By:
Ray t "ens, ayor
ATTEST:
APPROVED AS TO LEGAL FORM:
By: By:
U nni e Walters, Debra am Dray v tc ,
ty Se retary City Attorney
DENTON COUNTY HISTORICAL MUSEUM
By:
lint
Clots aug , Chair
Board of Trustees
ATTEST:
APPROVED A TO LEG L 0
By: By: d yk ~
Secretary David W. biles, Attorney
PAGE 9