2011-2171lcodadldepartmentsllegallour documentslordinances1111hot fundldenton county historical ord l.doc
ORDINANCE NO. 2� 11-217
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
1NTERLOCAL AGREEMENT BETWEEN THE CITY OF DENTON AND DENTON
COUNTY FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE IN SUPPORT OF
THE DENTON COUNTY HISTORICAL COMMISSION; AND PROVIDING AN
EFFECTIVE DATE.
VJHEREAS, Tex. T� Code §351.101(a) authorizes the City of Denton, Texas to use
revenue from its municipal hotel occupancy t� to promote tourism and the convention and hotel
industry by advertising and conducting solicitations and promotional programs to attract tourists and
convention delegates or registrants to the municipality or its vicinity to visit preserved historic sites
and museums; and
WHEREAS, the County of Denton, Texas is well equipped to perform those activities by its
operation of the Denton County Historical Commission; and
WHEREAS, Tex. T� Code §351.101(c) authorizes the City of Denton, Texas to delegate
by contract with the County of Denton, Texas, as a governmental entity, the management and
supervision of programs and activities of the type described hereinabove funded with revenue from
the municipal hotel occupancy tax; and
WHEREAS, both the City of Denton, Texas and the County of Denton, Texas have a
secondary source of authority to enter into an interlocal cooperation agreement, pursuant to Chapter
791 of the Texas Government Code, as: the agreement is authorized by both governmental bodies;
the agreement states the purpose, terms, rights, and duties of the contracting parties; the
consideration is being paid by City of Denton, Texas out of current revenues; the compensation is
fair; and the services to be performed are "museum services" autharized under §791.003(3)(F) of
the Texas Government Code, which each party is authorized to perform individually; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager, or his designee, is hereby authorized to execute an
interlocal agreernent between the City of Denton and Denton County for the payment and use of
hotel tax revenue in support of the Denton County Historical Commission, under the terms and
conditions contained in the agreement, a copy of which is attached hereto and made a part
hereof.
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval.
�
PASSED AND APPROVED this the �`� day of
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
,
BY:
APPROVED AS TO LEGAL FORM:
Page 2
� , 2011.
AGREEMENT BETWEEN THE CITY OF DENTON AND
DENTON COUNTY, TEXAS (DENTON HISTORICAL COMMISSION) (PY2012)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the "CITY"), and the County of Denton, Texas, a governmental entity existing under the laws of
the State of Texas (the "COLTNTY"), contracting on behalf of its Denton County Historical
Commission.
WHEREAS, T�x. TAx CoDE §351.002 authorizes 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
WIIEREAS, by ordinance, 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 CITY to use revenue from its
municipal hotel occupancy tax to promote tourism and the convention and hotel industry by
advertising and conducting solicitations and promotional programs to attract tourists and convention
delegates ar registrants to the mwucipality ar its vicuuty, as well as to engage in historical
restoration and preservation projects and activities; and
WHEREAS, COIJNTY is well equipped to perform those activities; and
WHEREAS, T�x. TAx CoDE §351.101(c) authorizes CITY to delegate by contract with
COUNTY, as a governmental entity, the management and supervision of programs and activities of
the type described hereinabove funded with revenue from the municipal hotel occupancy tax; and
WHEREAS, both CITY and COUNTY have a secondary source of authority to enter into
this Agreement as an interlocal cooperation agreement, pursuant to Chapter 791 of the Texas
Government Code, as: the Agreement is authorized by both governmental bodies; the Agreement
states the purpose, terms, rights, and duties of the contracting parties; the consideration is being paid
by CITY out of current revenues; the compensation is fair; and the services to be performed are
"restoration and repair services" authorized under §791.003(3)(F) of the Texas Government Code,
which each pariy is authorized to perform individually;
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, CITY and COLTNTY agree and contract as follows:
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and in consideration of the activities to be performed by COUNTY
under this Agreement, CITY agrees to pay to COLTNTY a portion of the hotel tax revenue collected
by CITY at the rates and in the manner specified herein (such payments by CITY to COUNTY,
sometimes herein referred to as the "agreed payments" or "hotel tax funds").
Denton County Historical Commission HOT Funding PY2012 - Page 1
1.2 Amount of Payments.
(a) As used in this Agreement, the following terms shall have the following specific
meanings:
(i) The term "hotel t� revenue" sha11 mean the gross monies collected and
received by CITY as municipal hotel occupancy tax at the rate of seven percent (7%) of
the price paid for a room in a hotel, pursuant to Texas Tax Code 351.002 and City
Ordinance. Hotel tax revenue will include penalty and interest related to the late
payments of the tax revenue by the taxpayer.
(ii) The term "Collection period" will mean the collection period for CITY's
fiscal year. It will include hotel t� revenue due to CITY for the relevant fiscal year and
collected through the 22nd day of the month following the close of the relevant fiscal year.
(iii) The term "base payment amount" shall mean a net amount of money equal
to the total hotel tax revenue collected by CITY during any relevant period of time (i.e.,
fiscal year or fiscal quarter), less: (1) attorney and auditing costs incurred during such
relevant period of time for costs of collection or auditing of hotel taxpayers. (attorney and
auditing costs include fees paid to attorneys or agents not in the regular employ of CITY for
which attorneys or agents effect compliance or collection of the hotel t� from taxpayers);
and (2) court costs and other expenses incurred in litigation against or auditing of such
taxpayers. ',
(iv) The term "contract quarter" shall refer to any quarter of the calendar year in
which this A�reement is in force. Contract quarters will end on March 31St, June 30�',
September 30 , and December 31St of each contract year.
(b) In return for satisfactory performance of the activities set forth in this Agreement
and all attachments hereto, CITY shall pay to COIJNTY an amount of money in each contract
year equal to the lesser amount of One and Thirly-Five One Hundredths percent (1.35%) of the
annual base payment amount, or the fixed contract amount of Seventeen Thousand Seven
Hundred and Thirty Dollars ($17,730). This amount will be divided into quarterly payments
equal to 25% of the annual fixed contract amount, unless CITY can show with reasonable
certainty that the annual base payment amount will be less than originally estimated for the fiscal
year. The fourth quarterly payment will represent 25% of the fixed contract amount or the
unpaid remainder of 1.35% of the base payment amount, whichever is less. If CITY's Chief
Financial Officer determines that hotel ta�c receipts by the CITY are not meeting the anticipated
budget proj ection, CITY rnay reduce COUNTY's current budget at any time during the contract
period. Each quarterly payment is subject to refund of any unused or improperly expended funds
from the prior contract period, and CITY's timely receipt of the required quarterly reports.
1.3 Dates of Payments.
(a) The term "quarterly payments" sha11 mean payments by CITY to COUNTY of those
amounts specified in ¶1.2, above, as deternuned by the hotel tax revenue collected.
Denton County Historical Commission HOT Funding PY2012 - Page 2
(b) Each quarterly payment shall be paid upon receipt of the required reports and
after the 25th day following the last day of the contract quarter. If any quarterly financial report is
not received within thirty (30) days of the end of the applicable contract quarter, the recipient may
be held in breach of this Agreement. CITY may withhold the quarterly payment(s) until the
appropriate reports are received and approved, which approval shall not be unreasonably withheld.
1.4 Other limitations regarding consideration.
(a) The fiuiding of this project in no way cominits CITY to future funding of this
program beyond the current contract period. Any future funding is solely the responsibility of
COUNTY.
(b) It is expressly understood that this contract in no way obligates the General Fund ar
any ather monies or credits of CITY.
(c) CITY may withhold further allocations if CITY deternunes that COUNTY's
expenditures deviate materially from their approved budget.
II. USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and in consideration of the payment by CITY to COUNTY of the agreed
payments of hotel tax funds specified above, COUNTY agrees to use such hotel t� funds only for
advertising and conducting solicitations and promotional programs to attract tourists and convention
delegates or registrants to the municipality or its vicinity; as authorized by TEx. T.� CoDE
§351.101(a). Funds for any calendar year which are unused by midnight December 315t of that year
shall be refunded to CITY within sixty (60) days.
Advertising materials purchased with the hotel occupancy tax funds must be targeted to reach
audiences outside the Denton city limits. These materials include, but are not lunited to, signs,
posters, postcards, newsletters and print advertising.
2.2 Specific Restrictions on Use of Funds.
(a) That portion of total administrative costs of COUNTY for which hotel tax funds may be
used sha11 not exceed that portion of COUNTY'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 local tourism and
the convention and hotel industry or the performance of the person's job in an efficient and
professional manner.
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
Denton County Historical Commission HOT Funding PY2012 - Page 3
(a) COLTNTY sha11 adhere to the budget (Exhibit "A") as approved by the City Council for
each calendar year, for all operations of COUNTY funded by hotel t� revenues. In other words,
CITY should be able to audit specifically the purpose of each individual expenditure of hotel taX
funds from the separate account relating to hotel tax funds. CITY shall not pay to COLTNTY any
hotel tax revenues as set forth in Section I of this contract during any program year of this
Agreement unless a budget for such respective program year has been approved in writing by the
Denton City Council, authorizing the expenditure of funds.
(b) COUNTY acknowledges that approval of the budget (E�chibit "A") by the Denton
City Council creates a fiduciary duty in COUNTY with respect to the hotel tax funds paid by CITY
to COLJNTY under this Agreement. COLTNTY shall expend hotel tax funds only in the manner and
for the purposes specified in this Agreement, 1�x. T� CoDE §351.101(a), and in the budget as
approved by CITY.
3.2 Separate Accounts. COUNTY sha11 maintain any hotel taX funds paid to COUNTY by
CITY in a separate account, or with segregated fund accounting, such that any reasonable person
can ascertain the revenue source of any given expenditure.
3.3 Financial Records. COUNTY shall maintain complete and accurate financial records of
each expenditure of the hotel t� funds made by COUNTY. These funds shall be classified as
restricted funds for audited financial purposes, and may not be used for contracted services,
including, but not limited to, auditing fees and attorney fees. Upon reasonable advance written
request of the Denton City Council, the City Manager or designate, or any other person, COUNTY
shall make such financial records available for inspection and review by the party making the
request. COLTNTY understands and accepts that a11 such fmancial records, and any other records
relating to this Agreement shall be subject to the Public Information Act, TEx. Gov'T CoDE, ch.
552, as hereafter amended.
3.4 Quarterly Reports. After initial receipt of hotel tax funds, and within thirty days after the
end of every quarter thereafter, until all funds have been expended and reported to CITY, COUNTY
shall furnish to CITY: (1) a completed financial report, (2) a list of the expenditures or copies of the
invoices or receipts made with regard to hotel tax funds, pursuant to TEx. T� CoDE §351.101(c),
and (3) a copy of all financial records (e.g., front and back copies of cleared checks or bank
statements, and other relevant documentation). Both the financial and expenditure reports will be in
a form either determined or approved by the City Manager or designate. COUNTY shall respond
promptly to any request from the City Manager of CITY, or designate, for additional information
relating to the activities performed under this Agreement.
3.5 Notice of Meetings. COiJNTY shall give the City Manager of CITY, or his designate,
reasonable advance written notice of the time and place of all meetings of COUNTY's Board of
Directors, as well as any other meeting of any constituency of COiJNTY, at which this Agreement
or any matter subject to this Agreement sha11 be considered.
IV. TERM AND TERMINATION
4.1 Term. The term of this Agreement shall commence on January 1, 2012 and terminate at
midnight on January 31, 2013. However, the program period sha11 commence on January 1, 2012
and terminate at midnight on December 31, 2012. Only those expenditures authorized by Chapter
Denton County Historical Commission HOT Funding PY2412 - Page 4
351 of the Texas Tax Code and the program guidelines, which are actually incurred during the
program period, for events and activities taking place within the program period, are eligible for
funding under this agreernent, and any ineligible expenditiu�es or unspent funds shall be forfeited to
CITY upon termination of the Agreement.
4.2 Termination Without Cause.
(a) This Agreement may be terminated by either party, with or without cause, by giving
the other party sixty (60) days advance written notice.
(b) In the event this contract is terminated by either party pursuant to Section 4.2(a),
CITY agrees to reimburse COUNTY for any contractual obligations of COLTNTY undertaken by
COUNTY in satisfactory performance of those activities specified in ¶¶2.1 and 2.2 above and
that were approved by the Council through the budget, as noted in ¶3.1. This reimbursement is
conditioned upon such contractual obligations having been incurred and entered into in the good
faith performance of those services contemplated in ¶¶2.1 and 2.2 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 CITY to reimburse
COiJNTY or to assume the performance of any contractual obligations of COUNTY for or under
any contract entered into by COLTNTY as contemplated herein shall not exceed 66 2/3% of the
current quarterly payment.
(c) Further, upon termination pursuant to ¶4.2(a), COLTNT�i' will provide CITY: 1)
within 10 business days from the termination notification, a short-term budget of probable
expenditures for the remaining 60 day period between termination notification and contract
termination. This budget will be presented to Council for approval within 10 business days after
receipt by CITY. If formal approval is not given within 10 business days and the budget does
not contain any expenditures that would be prohibited by the Texas Tax Code, and is within the
current contractual period approved budget; the budget will be considered approved; 2) within 30
days, a full accounting of all expendituxes not previously audited by the City; 3) within 5
business days of a request from CITY, a listing of expenditures that have occurred since the last
required reporting period; 4) a final accounting of all expenditures and tax funds on the day of
termination. COUNTY will be obligated to return any unused funds or funds determined to be
used improperly. Any use of remaining funds by COUNTY after notification of termination is
conditioned upon such contractual obligations having been incurred and entered into in the good
faith performance of those services contemplated in 2.1 and 2.2 above, and further conditioned
upon such contractual obligations having a term not exceeding the full term of this Agreement.
4.3 Automatic Termination. This Agreement shall automatically terminate upon the
occurrence of any of the following events:
(a) The termination of the legal existence of COLTNTY;
(b) The insolvency of COITNTY, the filing of a petition in bankruptcy, either voluntarily
or involuntarily, or an assignment by COLTNTY for the benefit of creditors;
Denton County Historical Commission HOT Funding PY2012 - Page 5
(c) The continuation of a breach of any of the terms or conditions of this Agreement by
either CITY or COUNTY for more than thirty (30) days after written notice of such breach is given
to the breaching party by the other party; or
(d) The failure of COLJNTY to submit a financial quarterly report which complies with
the reporting procedures required herein and generally accepted accounting principles prior to the
beginning of the next contract term, or quarterly as required by Section 1.3 hereof.
4.4 Right to Immediate Termination Upon Litigation. Notwithstanding any other provision
of this Agreement, to mitigate damages and to preserve evidence and issues for judicial
determination, either party shall have the right to ternlinate this Agreement upon immediate notice
to the other party in the event that any person has instituted litigation concerning the activities of the
non-terminating party, and the terminating party reasonably believes that such activities are required
or prohibited under this Agreement.
4.5 In the event that this Agreement is terminated pursuant to ¶¶4.3 or 4.4, COLJNTY agrees to
refund any and all unused funds, or funds determined by CITY to have been used improperly,
within 30 days after termination of this Agreement.
V. GENERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor
be construed to prohibit, the agreement by COiJNTY with another private entity, person, or
organization for the performance of those services described in ¶2.1 above. In the event that
COLJNTY enters into any arrangement, contractual or otherwise, with such other entity, person or
organization, COUNTY shall cause such other entiiy, person, or arganization to adhere to, confortn
to, and be subject to all provisions, terms, and conditions of this Agreement and to TEx. TAx CoDE
ch. 351, including reporting requirements, separate funds maintenance, and limitations and
prohibitions pertaining to expenditure of the agreed payments and hotel tax funds.
5.2 Independent Contractor. COLTNTY sha11 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
CITY. COUNTY shall have exclusive control of its operations and performance of services
hereunder, and such persons, entities, or organizations performing the same and COT.JNTY shall be
solely responsible for the acts and omissions of its directors, officers, employees, agents, and
subcontractors. COiJNTY shall not be considered a partner or joint venturer with CITY, nar shall
COUNTY be considered nor in any manner hold itself out as an agent or official representative of
CITY.
5.3 Indemnification. COiTNTY AGREES TO INDEMNIFY, HOLD HARMT�ESS, AND
DEFEND CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES FROM AND AGAINST
ANY AND ALL CLAIMS OR SUITS FOR INJURIES, DAMAGE, LOSS, OR LIABILITY
OF WHATEVER HIND OR CHARACTER, ARISING OUT OF OR IN CONNECTION
WITH THE PERFORMANCE BY COUNTY 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
Denton County Historical Commission HOT Funding PY2012 - Page 6
ACTS OF CIIAMBER, ITS OFFICERS, EMPLOYEES, AGENTS, SUBCONTRACTORS,
LICENSEES AND INVITEES.
5.4 Assignment. COUNTY shall not assign this Agreement without first obtaining the written
consent of CITY.
5.5 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
City Manager
City of Denton
215 E. McKiruiey
Denton, TX 76201
COUNTY
Denton County Historical Commission
Rosyln Shelton
110 West Hickory
Denton, Texas 76201
5.6 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 CITY and COUNTY and their respective successors and assigns.
5.7 Application of Laws. All terms, conditions, and provisions of this Agreement are subject
'� to all applicable federal laws, state laws, the Charter of the City of Denton, a11 ordinances passed
pursuant thereto, and all judicial determinations relative thereto.
5.8 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 understandings, oral or written, express
or implied, between or among the parties hereto, relating to the subject matter of this Agreement,
which are not fully expressed herein. The terms and conditions 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.
5.9 Duplicate Originals. This Agreement is executed in duplicate originals.
5.10 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
limitation, definition, or extension of the specific terms of the section and paragraph so designated.
5.11 Severability. If any section, subsection, paragraph, sentence, clause, phrase or word in this
Agreement, or application thereof to any person or circumstance is held invalid by any court of
competent jurisdiction, such holding shall not affect the validity of the remaining portions of this
Agreement, and the parties hereby declare they would have enacted such remairung portions despite
any such invalidity.
Denton County Historical Commission HOT Funding PY2012 - Page 7
5.12 Insurance. COUNTY shall provide insurance as follows:
1. Statutory Workers' Compensation and Employers' Liability
($100,000/$500,000/$100,000), and
Proof of coverage shall be submitted prior to any payment by CITY.
5.13 Waiver of Immunity for Suit to Enforce. By executing and authorizing the execution of
this contract, DENTON COLTNTY, TEXAS expressly waives immunity from any suit brought by
CITY for the enforcement of the provisions contained herein, and fiarther expressly waives the
presentment required of Tex. Loc. Gov't Code sec. 89.004 as a prerequisite to such suit.
/5�
EXECUTED this
ATTEST:
day of � , 2011.
�
� _II .,a►.� i � � � �
�I ' \9� �� �
�, . ,.
ATTEST:
THE CITY OF DENTON, TEXAS
��
�
By:
G OR E C. CAMPBELL,
CITY NIANAGER �
APPROVED AS TO
:
�TA BURGESS,
CITY ATTORNEY
DENTON COUNTY,
:
FORM:
APPROVED AS TO LEGAL FORM:
By: By:
SECRETARY DIS
Denton County Historical Commission HOT F
PY2012 - Page 8
Exhibit A
��r���a� C�aa�$� E�is��o�ocad ��o�r�os���e�
Denton County Historical Park: Welcome Center ond EIm Ridge Church
HOT Budget PY12
HisYOrical
Restoration and Repair - welcome center and church $17,730 �
TOTAL $17,73�