1990-035ORDINANCE NO. 90 "03%5
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN
THE CITY OF DENTON AND THE GREATER DENTON ARTS COUNCIL FOR THE
PAYMENT AND USE OF HOTEL TAX REVENUE FOR THE ARTS; 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 Greater Denton Arts
Council for the payment and use of hotel tax revenue for the Arts,
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.
PASSED AND APPROVED this the / 2~1'day of 1990.
RAY ST H NS, YOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY: xozl~
gdac#2.ord
2926L
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE GREATER DENTON ARTS COUNCIL
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 Greater Denton Arts
Council, a non-profit corporation incorporated under the laws of
the State of Texas (the "GDAC"):
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)(4) authorizes the City to
use revenue from its municipal hotel occupancy tax to promote
tourism and the convention and hotel industry for the encourage-
ment, promotion, improvement, and application of the arts, in-
cluding instrumental and vocal music, dance, drama, folk art,
creative writing, architecture, design and allied fields, painting,
sculpture, photography, graphic and craft arts, motion pictures,
radio, television, tape and sound recording, and other arts related
to the presentation, performance, execution, and exhibition of
these major art forms; and
WHEREAS, the GDAC is well equipped to perform those acti-
vities; and
WHEREAS, TEX. TAX CODE §351.101 (c) authorizes the City to
delegate by contract with the GDAC 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
GDAC agree and contract as follows:
I. HOTEL TAX REVENUE PAYMENT TO GDAC
1.1 Consideration. For and in consideration of the activities
to be performed by the GDAC under this Agreement, the City agrees
to pay to the GDAC 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 GDAC sometimes herein referred to as
"the agreed payments" or "hotel tax funds").
1.2 Amount of Payments to GDAC.
(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 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 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 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 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 com-
pliance, 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 tax-
PAGE 2
payers or audit such taxpayers, and (2) court costs
and expenses incurred in litigation against or audit-
ing of such taxpayers.
(b) The City shall pay to the GDAC an amount of money equal
to one hundred percent (100%) of the base payment amount for the
term of this Agreement.
1.3 Dates of Payments to GDAC.
(a) The term "quarterly payments" shall mean payments by
the City to the GDAC 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
GDAC 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 GDAC the agreed payments speci-
fied in 41.2 above quarterly. Each such quarterly payment shall
be paid to the GDAC 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 GDAC
specified in 41.2 above shall be paid monthly. Each such monthly
payment shall be paid to the GDAC 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 GDAC
2.1 Use of Funds. For and in consideration of the payment by
the City to the GDAC of the agreed payments of hotel tax funds
and such other funds received or raised from other sources as
contemplated herein only for the purposes of encouragement, pro-
motion, improvement, and application of the arts, including in-
strumental and vocal music, dance, drama, folk art, creative
writing, architecture, design and allied fields, painting, sculp-
ture, photography, graphic and craft arts, motion pictures, radio,
television, tape and sound recording, and other arts related to
the presentation, performance, execution, and exhibition of these
major art forms.
2.2 Administrative Costs. The hotel tax funds received from
the City by the GDAC may be spent for day-to-day operations, sup-
PAGE 3
plies, salaries, office rental, travel expenses, and other admin-
istrative costs that are incurred directly in the performance by
the GDAC 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 GDAC
for which hotel tax funds may be used shall not exceed that por-
tion of the GDAC's administrative costs actually incurred in con-
ducting 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 GDAC 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 GDAC and any other
operation or function of the GDAC in which the hotel tax funds
shall be used by the GDAC. The City shall not pay to the GDAC
any agreed pay- ments or hotel tax funds during any fiscal year
of this Agreement unless such budget for such respective fiscal
year has been ap- proved in writing by the Denton City Council.
(b) The GDAC acknowledges that the approval of such budget
by the Denton City Council creates a fiduciary duty in the GDAC
with respect to the hotel tax funds paid by the City to the GDAC
under this Agreement. The GDAC shall expend hotel tax funds only
in the manner and for the purposes specified in the budget as
approved by the City.
3.2 Separate Accounts. The GDAC shall maintain any hotel tax
funds paid to the GDAC by the City in a separate account or ac-
counts established for such purpose and may not commingle such
hotel tax funds with any other money or maintain such hotel tax
funds in any other account.
3.3 Financial Records. The GDAC shall maintain complete and
accurate financial records of each expenditure of the hotel tax
funds made by the GDAC and, upon reasonably advance written re-
quest of the Denton City Council or the City's Executive Director
of Finance or his designee, shall make such financial records
PAGE 4
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. The GDAC shall furnish to the City a
report of the services performed by the GDAC under this Agreement
within thirty (30) days after the end of each fiscal quarter of
this Agreement. Such report shall summarize the activities of
the GDAC in performance of the services specified in 42.1 and 42.2
above and the receipt of the agreed payments and expenditure of
the hotel tax funds received by the GDAC from the City. The GDAC
shall also provide to the City copies of each contract entered
into by the GDAC which contract deals with the use or expenditure
of hotel tax funds or the performance of those activities speci-
fied in paragraph 2.1 and which have a term of more than six (6)
months.
3.5 Notice of Meetings. The GDAC shall give the City Manager
of the City advance written notice of the time and place of
meetings of the GDAC Board of Directors. Notice shall be given
in the same manner and at the same time as notice is given of
such meetings to members of the board. This provision shall not
be deemed to require the GDAC to admit the City Manager to any
executive session of the Executive Committee of the GDAC.
IV. REIMBURSEMENT AND INDEMNIFICATION
4.1 Reimbursement of GDAC for Administrative Costs. In the
event that this Agreement is terminated pursuant to Section
5.2(a), the City agrees to reimburse the GDAC for any and all
expenses and costs undertaken by the GDAC in performance of those
activities specified in 42.1 above or expenses or costs incurred
by the GDAC as described in 42.2 above. The City is obligated to
reimburse the GDAC 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 GDAC during the one
hundred eighty day period preceding termination or the agreed
payments otherwise due and payable to the GDAC for such period.
4.2 Reimbursement of GDAC for Contractual Obligations. In
the event that this Agreement is terminated pursuant to Section
5.2(a), the City agrees to reimburse the GDAC for any and all
contractual obligations of the GDAC undertaken by the GDAC 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
PAGE 5
contrary, the obligation of the City to reimburse the GDAC for or
under any contractual obligations of the GDAC for or under any
contract entered into by the GDAC as contemplated herein shall
not exceed FIVE THOUSAND DOLLARS ($5,000.00). 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 GDAC.
(a) With respect to expenses and costs incurred by the
GDAC for which the City is obligated to reimburse the GDAC pur-
suant to 44.1 above, the City shall pay such reimbursement amount
due, if any, to the GDAC on or before the forty-fifth (45th) day
after the date this Agreement is terminated. In the event that
the agreed payments are such paid monthly pursuant to 1rl.3 (c)
above, the City shall pay reimbursement amount to the GDAC on or
before the forty-fifth (45th) day after the last day of such
respective calendar month in which this Agreement is terminated.
(b) With respect to contractual obligations undertaken by
the GDAC for which the City is obligated to reimburse the GDAC
for or under any contract entered into by the GDAC as contemplated
herein as provided in 44.2 above, the City shall reimburse the
GDAC for such contractual costs, expenses, and monetary
obligations required in such contractual obligation in such
amounts and at those times such contractual costs and expenses
are due and payable according to the terms of such contract,
subject to the limitation set forth in 44.2 above.
4.4 Indemnification. The GDAC agrees to indemnify, hold
harmless, and defend the City, its officers, agents, and em-
ployees 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 GDAC 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 GDAC, its officers, employees, agents,
subcontractors, licensees and invitees.
V. TERM AND TERMINATION
5.1 Term. The term of this Agreement shall commence April 1,
1990 and terminate at midnight 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.
PAGE 6
(b) This Agreement shall automatically terminate upon the
occurrence of any of the following events:
(i) The termination of the corporate existence
of the GDAC;
(ii) The insolvency of the GDAC, the filing of
a petition in bankruptcy, either volunta-
rily or involuntarily, or an assignment
by the GDAC 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 GDAC 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 GDAC with another private entity, person, or
organization for the performance of those services described in
42.1 above. In the event that the GDAC enters into any arrange-
ment, contractual or otherwise, with such entity, person or
organization, the GDAC shall cause such other entity, person, or
organization to adhere to, conform to, and be subject to all pro-
visions, 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 GDAC 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 GDAC shall have exclusive control of its oper-
ations and performance of services hereunder, and such persons,
entities, or organizations performing the same and the GDAC shall
be solely responsible for the acts and omissions of its directors,
officers, employees, agents, and subcontractors. The GDAC shall
not be considered a partner or joint venturer with the City, nor
shall the GDAC be considered nor in any manner hold itself out as
an agent or official representative of the City.
6.3 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
PAGE 7
States mail, certified mail, return receipt requested, addressed
to the respective parties as follows:
City:
Greater Denton Arts Council
City Manager Executive Director
City of Denton Greater Denton Arts Council
215 E. McKinney 207 South Bell
Denton, TX 76201 Denton, TX 76201
6.4 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 GDAC and their respective successors
and assigns.
6.5 Application of Laws. All terms, conditions, and pro-
visions 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.
6.6 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.
6.7 Duplicate Originals. This Agreement is executed in
duplicate originals.
6.8 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 this day of
1990.
THE CITY OF DENTON, TEXAS
By. -
Ray p ens, Mayor
PAGE 8
ATTEST:
APPROVED AS TO LEGAL FORM:
1 \
By: By: C~C iZZ
J nni er Walters,/ 'Debra A am Dray itc ,
City Secretary City Attorney .
GREATER DENT N ARTS COUNCIL
By:
Robert M. Estes,
President
ATTEST:
By:
Sec dl'yt
PAGE 9