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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