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1990-034ORDINANCE NO. 9 0 r 0 3 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 RENOVATION OF THE OLD CITY STEAM PLANT; 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 renovation of the old City Steam Plant, 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~A day of ~ 1990. RAY ST H S, OR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY : 2e_~j- l./,Lc jkef- ~ ) z u APPROVED AS TO LEGAL FORM: DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY BY : -jN.,a gdac.res 2925L AGREEMENT BETWEEN THE CITY OF DENTON AND THE GREATER DENTON ARTS COUNCIL PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE FOR THE RENOVATION OF THE OLD CITY STEAM PLANT 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) authorizes the City to use revenue from its municipal hotel occupancy tax to promote tourism and the convention and hotel industry by the acquisition of sites for and the construction, improvement, enlarging, equipping, re- pairing, operation and maintenance of convention center facilities, and for historical restoration and preservation projects or acti- vities or advertising and conducting solicitations and promotional programs to encourage tourists and convention delegates or regis- trants to visit preserved historic sites or museums at or in the immediate vicinity of convention center facilities or located elsewhere in the municipality or its vicinity that would be fre- quented by tourists, convention delegates, or other visitors to the municipality; and WHEREAS, the City has leased to the GDAC the "Old City Steam Plant:, which the GDAC proposes to renovate by the use of public and private funds and thereafter operate the facility for the benefit of the community and in furtherance of those objectives set forth above; and WHEREAS, the City wishes to allocate hotel tax revenue funds to be used for the specific purpose of renovating the "Old City Steam Plant"; and WHEREAS, the GDAC is well equipped to raise the necessary private funds and perform the renovation project as contemplated by this Agreement and the lease agreement between the City and the GDAC; 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 GDAC raising the necessary private funds and undertaking the reno- vation, restoration, and preservation of the "Old City Steam Plant", 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 PAGE 2 (2) court costs and expenses incurred in litigation against or auditing 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 calendar month during the term of this Agreement. (b) City shall pay the GDAC the agreed payments specified 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 Ordinances 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 speci- fied in 41.2 above shall be paid monthly. Each such monthly pay- ment 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 improving, enlarg- ing, equipping, repairing, restoring, and preserving the "Old City Steam Plant" property under lease from the City, as autho- rized by TEX. TAX CODE 4351.101 (a)(1) and (5). 2.2 Other Authorized Use of Funds. The hotel tax funds received from the City by the GDAC may be spent for architectural, engi- neering, and other related professional expenses and fees incurred in the performance by the GDAC of those functions specified in 42.1 above. 2.3 Specific Restrictions on Use of Funds. The hotel tax PAGE 3 funds received from the City by the GDAC may not be used for administrative costs or expenses, including day-to-day opera- tions, supplies, salaries, office rental, travel expenses, or other administrative costs of the GDAC. 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 ensu- ing 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 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 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 request of the Denton City Council or the City's Executive Director of Finance or his desig- nee, 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. 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. 3.5 Notice of Meetings. The GDAC shall give the City Manager PAGE 4 of the City advance written notice of the time and place of general meetings of the GDAC Board of Directors. Such 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. INDEMNIFICATION 4.1 Indemnification. The GDAC 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 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, sub- contractors, licensees and invitees. V. TERM AND TERMINATION 5.1 Term. The term of this Agreement shall be for two (2) years, commencing April 1, 1990 and terminating at midnight on March 31, 1992, or upon completion of the renovation of the Old City Steam Plant, whichever event occurs first. Provided, how- ever, notwithstanding any provision to the contrary, this Agree- ment shall terminate upon the earlier occurrence of midnight on March 31, 1992 or the completion of renovation of the Old City Steam Plant. 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 GDAC; (ii) The insolvency of the GDAC, the filing of a petition in bankruptcy, either volun- tarily or involuntarily, or an assignment by the GDAC for the benefit of creditors; or PAGE 5 (iii) The continuation of a breach of any of the terms or conditions of this Agreement by either party 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 or- ganization, 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 main- tenance, and limitations and prohibitions pertaining to expendi- ture of the agreed payments and hotel tax funds. 6.2 Independent Contractor. The GDAC shall operate as an in- dependent 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 opera- tions 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 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 Greater Denton Arts Council Executive Director Greater Denton Arts Council 207 South Bell 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- PAGE 6 gation of the City and the GDAC and their respective successors and assigns. 6.5 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. 6.6 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 M a"'4& JQ"'4& , 1990. THE CITY OF DENTON, TEXAS By: 44_~_ zs-t~ Ray lephens,/Mayor ATTEST: APPROVED AS TO LEGAL FORM: By By : nni,rer- waiters , City Secretary ' L., 112~,~ ~l~ e ra ami rayov t~- City Attor fey PAGE 7