2015-339\ \codad \departments \legal \our documents \ordinances \15 \hot funds py16 \black chamber ordinance.doc
ORDINANCE NO. 2015-339
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON BLACK
CHAMBER OF COMMERCE 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 Denton Black Chamber of Commerce 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
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
day of ZL. ,,, I � 2015.
m ,,,,........m
- --------------
CHRIS WATTS, MAY,
1 1•' 1, 1 � i„
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the "CITY "), and the Denton Black Chamber of Commerce, a legal entity existing under the laws
of the State of Texas (the "CHAMBER"):
WHEREAS, TEX. 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
WHEREAS, 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 or registrants to the municipality or its vicinity; and
WHEREAS, CHAMBER is well equipped to perform those activities; and
WHEREAS, TEX. TAX CODE §351.101(c) authorizes CITY to delegate by contract with
CHAMBER, as an independent entity, 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, CITY and CHAMBER agree and contract as follows:
1.1 Consideration. For and in consideration of the activities to be performed by CHAMBER
under this Agreement, CITY agrees to pay to CHAMBER a portion of the hotel tax revenue
collected by CITY at the rates and in the manner specified herein (such payments by CITY to
CHAMBER, sometimes herein referred to as the "agreed payments" or "hotel tax funds ")
1.2 Amount of Payments.
(a) As used in this Agreement, the following terms shall have the following specific
meanings:
(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
Ordinance. Hotel tax revenue will include penalty and interest related to the late
payments of the tax revenue by the taxpayer.
Black Chamber HOT Funding PY2016 - Page 1
(ii) The term "Collection period" will mean the collection period for CITY's
fiscal year. It will include hotel tax 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.
(iv) The term "contract quarter" shall refer to any quarter of the calendar year in
which this Agreement is in force. Contract quarters will end on March 31", June 30th
September 30'h, and December 31St of each contract year.
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Black Chamber HOT Funding PY2016 - Page 2
(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 determines that CH ER's
expenditures deviate materially from their approved budget.
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 limited to, signs,
posters, postcards, newsletters and print advertising.
(a) That portion of total administrative costs of the CHAMBER for which hotel tax
funds may be used shall not exceed that portion of the C BER'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.
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1110 1 45 513 1 Diem
3.1 Budget.
Black Chamber HOT Funding PY2016 - Page 3
(b) CHAMBER acknowledges that approval of the budget (Exhibit "A ") by the Denton
City Council creates a fiduciary duty in CHAMBER with respect to the hotel tax funds paid by
CITY to CHAMBER under this Agreement. CHAMBER shall expend hotel tax funds only in the
manner and for the purposes specified in this Agreement, TEX. TAX CODE §351.101(a), and in the
budget as approved by CITY.
(c) Upon the application or consent of CHAMBER, the City Manager or his designate
may authorize minor amendments to the approved budget as necessary to carry out the intent of this
Agreement, in a manner consistent with efficient use of public funds, and in accordance with State
law. Such minor amendments may not increase the overall funding set forth in 11.2(b), extend the
term, or otherwise alter the performance obligations of CHAMBER, without approval of the City
Council by ordinance.
3.2 Separate Accounts. CHAMBER shall maintain any hotel tax funds paid to CHAMBER 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. CHAMBER shall maintain complete and accurate financial records of
each expenditure of the hotel tax funds made by CHAMBER. 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,
CHAMBER shall make such financial records available for inspection and review by the party
making the request. CHAMBER understands and accepts that all such financial 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 (30) days after
the end of every quarter thereafter, until all funds have been expended and reported to CITY,
CHAMBER 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. TAX 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. CHAMBER 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. CHAMBER shall give the City Manager of CITY, or his designate,
reasonable advance written notice of the time and place of all meetings of CHAMBER's Board of
Directors, as well as any other meeting of any constituency of CHAMBER, at which this
Agreement or any matter subject to this Agreement shall be considered.
1 V V I 10F.11 0 1810
4.1 Term. The term of this Agreement shall commence on January 1, 2016 and terminate at
midnight on January 31, 2017. However, the program period shall commence on January 1, 2016
and terminate at midnight on December 31, 2016. Only those expenditures authorized by Chapter
Black Chamber HOT Funding PY2016 - 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 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 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 14.2(a), CITY
agrees to reimburse CHAMBER for any contractual obligations of CHAMBER undertaken by
CHAMBER in satisfactory performance of those activities specified in 112.1 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
CHAMBER or to assume the performance of any contractual obligations of CHAMBER for or
under any contract entered into by CHAMBER as contemplated herein shall not exceed 66 2/3%
of the current quarterly payment.
(c) Further, upon termination pursuant to 14.2(a), CHAMBER will provide CITY: 1)
within ten (10) business days from the termination notification, a short-term budget of probable
expenditures for the remaining sixty (60) day period between termination notification and
contract termination. This budget will be presented to Council for approval within ten (10)
business days after receipt by CITY. If formal approval is not given within ten (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 thirty (30) days, a full accounting of all expenditures not
previously audited by the City; 3) within five (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. CHAMBER will be obligated to
return any unused funds or funds determined to be used improperly. Any use of remaining funds
by CHAMBER 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 CHAMBER;
(b) The insolvency of CHAMBER, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an assignment by CHAMBER for the benefit of creditors;
Black Chamber HOT Funding PY2016 - Page 5
Fri'm
5.2 Independent Contractor. CHAMBER 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, CIIAMBER shall have exclusive conti-ol of its operations and performance of services
l'iereunder, and such persons, entities, or organizations performing the same and CUAMBER shall
be solely responsible for the acts and omissions of its directors, officers, employees, agents, and
subcontractors. CHAMBER shall not be considered a partner or joint venturer with CITY, nor shall
CHAMBER be considered nor in any manner hold itself out as an agent or official representative of
CITY.
Black Chamber HOT Funding PY2016 - Page 6
OR INTENTIONAL ACTS OF CHAMBER, ITS OFFICERS, EMPLOYEES, AGENTS,
SUBCONTRACTORS, LICENSEES AND INVITEES.
5.4 Assignment. CHAMBER shall not assign this Agreement without first obtaining the
written consent of CITY.
5.5 Notice. Any notice required to • given under this Agreement • any statute, ordinance, or
AWjbkupArAt#T.r4Yq4_ive_when given in writinL%W_ddevosited in the United States mail, certifle-0
mail, return receipt requested, or by hand-delivery, addressed to the respective parties as follows:
ILL"'ITY CHAMBALI
City Manager
Denton Black Chamber of Commerce
City of Denton
John Baines
215 E. McKinney
P.O. Box 51026
Denton, TX 76201
Denton, Texas 76206
1
45.6 Inurement. This Agreement and each provision hereof, and each and every right, duty,
*bligation, and liability set forth herein shall be binding upon and inure to the benefit and obligation
*f CITY and CHAMBER and their respective successors and assigns.
5.7 Application of Laws. All terrns, conditions, and provisions of this Agreement are subject
• all applicable federal laws, state laws, the Charter • the City • Denton, all ordinances passed
pursuant thereto, and all judicial determinations relative thereto.
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 • convenience and do not express • imply any
limitation, definition, • extension • the specific terms • the section and paragraph so designated.
5.12 Insurance. CHAMBER shall, at a minimum, provide insurance as follows:
1. $500,000 Commercial General Liability, or $1,000,000 Event Insurance, covering
all events taking place on City -owned property,
2. Statutory Workers' Compensation and Employers' Liability
($100,000 1$500,000 1$100,000), and
3. $250,000 Liquor/Dram 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 all policies (except Workers' Compensation), and
proof of coverage shall be submitted prior to any payment by the CITY.
EXECUTE his (Jay of �'�'�� � �o , 2015.
ATTEST:
By:
l l , " TERS,
T'ry SE " ..E "1'AI "
THE CITY OF DENTON, TEXAS
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By (aEORGE^, C. CAC IP .,
CITY MANAGER
APPROVED AS TO
Ali ITA BURGESS,
CITY A'µ1 "1 "0RI
Dl "I" Y BLACK
C 1 "ICI
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ill
ATTEST:
APPROVED AS TO LEGAL FORM:
By: By_ .
Secretary
Black Chamber HOT Funding PY2016 - Page 8
Denton •'
Denton Blues Festival
Budget 2016
m
Advertising 13,572
Ual
Artists $3,000
Art $3,DDO
Total $16,572
$1,500
Internet
Radio
5,500
Billboards
5,500
Printed Matter
1,072
Advertising 13,572
Ual
Artists $3,000
Art $3,DDO
Total $16,572