2012-285UcodadldepartmentsUegal\our documentslordinances\121hot fund py131susangkomen ord.doc
ORDINANCE NO. 2O12-ZgS
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND THE SUSAN G. KOMEN FOR
THE CURE ADVOCACY ALLIANCE (NORTH TEXAS AFFILIATE) FOR THE PAYMENT
AND USE OF HOTEL TAX REVENUE; AND PROVIDING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager, or his designee, is hereby authorized to execute an
agreement between the City of Denton and the Susan G. Komen for the Cure Advocacy Alliance
(North Texas Affiliate) 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 2. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the ���1'L day of ���(�� , 2012.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
�
BY: �
APPROVED AS TO LEGAL FORM:
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE SUSAN G. KOMEN FOR THE CURE ADVOCACY ALLIANCE
(NORTH TEXAS AFFILIATE) (PY2013)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a municipal corparation
(the "CITY"), and Susan G. Komen for the Cure Advocacy Alliance (North Texas Affiliate), a legal
entity incorporated under the laws of the State of Texas (the "ORGANIZATION"):
WHEREAS, TEx. TAx CoDE §351.002 authorizes CITY to levy by ordinance a municipal
hotel occupancy t� ("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, `I�x. T.� 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 or registrants to the municipality or its vicinity; and
WHEREAS, ORGANIZATION is well equipped to perform those activities; and
WHEREAS, 'TEx. TAX CODE §3 S 1.101(c) authorizes CITY to delegate by contract with
ORGANIZATION, as an independent entity, the management and supervision of programs and
activities of the type described hereinabove funded with revenue from the municipal hotel
occupancytax;
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, CITY and ORGAl�iIZATION agree and contract as follows:
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and in consideration of the activities to be performed by
CORPORATION under this Agreement, CITY agrees to pay to ORGANIZATION a portion of the
hotel tax revenue collected by CITY at the rates and in the manner specified herein (such payments
by CITY to ORGANIZATION sometimes herein referred to as the "agreed payments" or "hotel t�
funds").
1.2 Amount of Payments.
(a) As used in this Agreement, the following terms shall have the following specific
meatungs:
(i) The term "hotel tax revenue" shall 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
Susan G. Komen HOT Funding PY2013 - Page 1
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 ta�� 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 t� 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 t�payers (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 taatpayers);
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 farce. Contract quarters will end on March 31 St, 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 ORGANIZATION an amount of money in each
contract year equal to the lesser amount of Sixty-Six One Hundredths percent (0.66%) of the
annual base payment amount, or the fixed contract amount of Ten Thousand Dollars ($10,000).
This amount will be divided into two payments equal to 50% 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 final payment will represent 50% of
the fixed contract amount or the unpaid remainder of 0.66% of the base payment amount,
whichever is less. If CITY's Chief Financial Officer determines that hotel tax receipts by the
CITY are not meeting the anticipated budget projection, CITY may reduce ORGANIZATION's
current budget at any time during the contract period. Each 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 "payments" shall mean payments by CITY to ORGANIZATION of those
amounts specified in ¶1.2, above, as deternuned by the hotel tax revenue collected.
(b) Each quarterly payment shall be paid upon receipt of the required reports and after the
25�' 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.
Susan G. Komen HOT Funding PY2013 - Page 2
1.4 Other limitations regarding consideration.
(a) The funding of this project in no way commits CITY to future funding of this program
beyond the current contract period. Any future funding is solely the responsibility of
ORGANIZATION.
(b) It is expressly understood that this contract in no way obligates the General Fund or any
other monies or credits of CITY.
(c) CITY may withhold further allocations if CITY deternunes that ORGANIZATION'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 ORGANIZATION of
the agreed payments of hotel tax funds specified above, ORGANIZATION agrees to use such hotel
ta.X 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. TAx CoDE §351.101(a). Funds for any calendar year which are unused by midnight December
31St of that year shall be refunded to CITY within siacty (60) days.
Advertising materials purchased with the hotel occupancy tax funds must be targeted to reach
audience outside the Denton city limits. These materials include, but are not limited to, signs,
posters, postcards, newsletters and print advertising.
2.2 Administrative Costs. The hotel taa� funds received from the CITY by the
ORGANIZATION may be spent for day-to-day operations, office supplies, salaries, travel
expenses, and other administrative costs allowed by TEX. TAX CODE 351.101(e), but only if
specified in ORGANIZATION's budget (Exhibit "A") and each are directly attributable to work on
programs which promote tourism and the hotel and convention industry, and if each promotes at
least one of the six statutory purposes enumerated within TEX. TAX CODE 351.101(a).
2.3 Specific Restrictions on Use of Funds.
(a) That portion of total administrative costs of the ORGANIZATION for which hotel
tax funds may be used shall not exceed that portion of the ORGANIZATION's administrative costs
actually incurred in conducting the activities specified in ¶2.1 above.
(b) Hotel t� 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 perfortnance of the person's job in an efficient and
professional manner.
Susan G. Komen HOT Funding PY2013 - Page 3
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
(a) ORGANIZATION sha11 adhere to the budget (Exhibit "A") as approved by the City
Council for each calendar year, for all operations of ORGANIZATION in which the hotel t� funds
sha11 be used by ORGANIZATION. In other words, CITY should be able to audit specifically the
purpose of each individual expenditure of hotel t� funds from the separate account relating to hotel
tax. CITY shall not pay to ORGANIZATION any hotel t� 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) ORGANIZATION acknowledges that approval of the budget (E�iibit "A") by the
Denton City Council creates a fiduciary duty in ORGANIZATION with respect to the hotel tax
funds paid by CITY to CORPORATION under this Agreement. ORGANIZATION shall expend
hotel tax funds only in the manner and for the purposes specified in this Agreement, TEx. T�
CoDE §351.101(a) and in the budget as approved by CITY.
3.2 Separate Accounts. ORGATTIZATION shall maintain any hotel ta�c funds paid to
ORGANIZATION 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. ORGANIZATION shall maintain complete and accurate financial
records of each expenditure of the hotel t� funds made by ORGANIZATION. These funds are
required to be classified as restricted funds for audited financial purposes, and may not be used for
contracted services, including, but not limited to, auditing fees or attorney fees. Upon reasonable
advance written request of the Denton City Council, the City Manager or designate, or any other
person, ORGA1vIZATION shall make such fmancial recards available for inspection and review by
the party making the request. ORGANIZATION understands and accepts that all such financial
records, and any other records relating to this Agreement shall be subject to the Texas Public
Information Act, T�x. Gov'T CoDE, ch. 552, as hereafter amended.
3.4 Quarterly Reports. After initial receipt of hotel taY funds, and within thirty days after the
end of every quarter thereafter, until a11 funds have been expended and reported to CITY,
ORGANIZATION sha11 furnish to CITY: (1) a completed fmancial report, (2) a list of the
expenditures or copies of the invoices or receipts made with regard to hotel t� funds pursuant to
TEx. Tax CoDE §351.101(c), and (3) a copy of a11 financial records (e.g., copies of front and back
cleared checics or bank statements, and other relevant documentation). Both the financial and
expenditure reports will be in a form either deternuned or approved by the City Manager or
designate. ORGANIZATION 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. ORGANIZATION shall give the City Manager of CITY, or his
designate, reasonable advance written notice of the time and place of all meetings of
ORG�IZATION's Board of Directors, as well as any other meeting of any constituency of
Susan G. Komen HOT Funding PY2013 - Page 4
ORGANIZATION, at which this Agreement or any matter subject to this Agreement shall be
considered.
IV. TERM AND TERMINATION
4.1 Term. The term of this Agreement shall commence on January 1, 2013, and terminate at
midnight on January 31, 2014. However, the program period shall commence on January 1, 2013
and terminate at midnight on December 31, 2013. Only those expenditures authorized by Chapter
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 agreement, and any ineligible expenditures or unspent funds shall be forfeited to
CITY upon termination of the Agreement.
4.2 Termination Without Cause.
(a) This Agreement may be ternunated 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 ORGANIZATION for any contractual obligations of
ORGANIZATION undertaken by ORGANIZATION 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 ORGANIZATION, or to assume the
performance of any contractual obligations of ORGANIZATION, for or under any contract
entered into by ORGANIZATION as contemplated herein, shall not exceed 66 2/3% of the
current quarterly payment.
(c) Further, upon ternunation pursuant to ¶4.2(a), ORGANIZATION 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 expenditures not previously audited by
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. ORGANIZATION will be obligated to return any unused funds,
or funds determined to be used improperly. Any use of remaining funds by ORGANIZATION
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.
Susan G. Komen HOT Funding PY2013 - Page 5
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 ORGANIZATION;
(b} The insolvency of ORGANIZATION, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an assignment by ORGANIZATION for the benefit of creditors;
(c) The continuation of a breach of any of the terms or conditions of this Agreement by
either CITY or ORGANIZATION 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 ORGANIZATION to submit a fmancial 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 parly shall ha�e the right to terminate this Agreement upon immediate notice
to the other party in the event that any person has instituted litigation concerning the activities of the
non-ternunating 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, ORGANIZATION
agrees to refund any and a11 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 ORGANIZATION with another private entity, person, or
organization for the performance of those services described in ¶2.1 above. In the event that
ORGANIZATION enters into any arrangement, contractual or otherwise, with such other entity,
person or organization, ORGANIZATION 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
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 t� funds.
5.2 Independent Contractor. ORGAIVIZATION 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 CITY. ORGANIZATION shall have exclusive control of its operations and
performance of services hereunder, and such persons, entities, or organizations performing the
same, and ORGANIZATION shall be solely responsible for the acts and omissions of its directors,
officers, employees, agents, and subcontractors. ORGANIZATION sha11 not be considered a
partner or joint venturer with CITY, nor shall ORGANIZATION be considered, nor in any manner
hold itself out as, an agent or ofFicial representative of CITY.
Susan G. Komen HOT Funding PY2013 - Page 6
5.3 Indemnification. ORGANIZATION AGREES TO INDEMNIFY, HOLD
HA�tMi.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 PERFORNIANCE BY CORPORATION 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 ORGAIVIZATION, ITS OFFICERS,
EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES.
5.4 Assignment. ORGANIZATION 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, sha11 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
215 E. McKinney
City of Denton
Denton, TX 76201
ORGANIZATION
Susan G. Komen for the Cure Advocacy
Alliance (North Texas Affiliate)
Glynis Anderson
PO Box 261730
Plano, Texas 75026
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 ORGANIZATION 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 CITY of Denton, all 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.
Susan G. Komen HOT Funding PY2013 - Page 7
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 sha11 not affect the validity of the remaining portions of this
Agreement, and the parties hereby declare they would have enacted such remaining portions despite
any such invalidity.
5.12 Insurance. ORGANIZATION shall provide insurance as follows:
1. $500,000 Commercial General Liability, or $1,000,000 Event Insurance, covering
all events taking place on City-ovmed property,
2. Statutory Workers' Compensation and Employers' Liability
($100,000/$500,000/$100,000), and
3. $250,000 LiquorlDram Shop Liability for any event occurring on City-owned
property where alcohol will be provided or served.
CITY must be named as an additional insured on a11 policies (except Workers' Compensation), and
proof of coverage shall be submitted prior to any payment by the CITY.
EXECUTED this /�IJL�!'C day of Oe �a� c2
ATTEST:
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THE CITY OF DENTON, TEXAS
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GEORGE C. CAMP ELL,
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APPROVE�AS T LEGAL RM.
SUSAN G. KOMEN FOR THE CURE
ADVOCACY ALLILANCE
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Susan G. Komen HOT Fund
ATTEST:
APPROVED AS TO LEGAL FORM:
By: By:
Secretary
Susan G. Komen HOT Funding PY2013 - Page 9
Susan G. Komen for the Cure
Komen North Texas Denton Race for the Cure
Program Year 2013 Budget
Advertising
Exhibit A
Mail List Purchase - Area counties $4,400
Postage - Area county postage for save the date postcards 2,800
Postage - Area county postage for pre-registration packets 2,800
Total Budget $10,000