2015-340\ \codad \departments \legal \our documents \ordinances \15 \hot funds py16 \community market ordinance.doe
ORDINANCE NO. 2015 -340
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON COMMUNITY
MARKET, INC. FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, TEx. TAX CODE §351.101 (the "HOT Statute ") 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, Denton Community Market, Inc. ( "MARKET "), a Texas domestic nonprofit
corporation in good standing, has applied for hotel tax funding, and has provided data
demonstrating that about 25% or more of individuals attending Market events are from outside
Denton; and
WHEREAS, MARKET has proposed a budget seeking a portion of hotel occupancy tax
revenues, to purchaser advertising targeted to individuals outside Denton, in hopes of further
increasing attendance by visitors from outside Denton at these events, and further promoting
tourism and the convention and hotel industry as a result; and
WHEREAS, MARKET has agreed to undertake the fiduciary obligation of ensuring that
any such funding would be expended in full compliance with the HOT Statute, and has further
assured its willingness to conduct operations in full compliance with the attached Agreement; and
WHEREAS, based upon the application, representations, and proposed budget submitted by
MARKET, the Council therefore finds that such an expenditure of hotel tax revenue would satisfy
the purposes of the HOT Statute; NOW THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SEC "I'IONwww_l. The City Manager, or his designee, is hereby authorized to execute an
agreement between the City of Denton and the Denton Community Market 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.
SECTIONww 2. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVI. 1) this the . duly o;1`"
. . .......... . .. ..... n---------
CHRIS W TTS, [vi AYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
I:
I ZZ11 1 0 1 0 1 0 1 1
=1110111 I
WIWI? I WE" 141
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the "CITY"), and the Denton Community Market, a legal entity incorporated under the laws of the
State of Texas (the "MARKET"):
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 q
hotel occupant; and
4 0 0 1 0 4 10 0 .11111 !11��111 . 0 1
I# III III 16J I ortl sail U-1 U016104 I I o. )]Ue WI N11511 1 1. 1 it
WHEREAS, TEX.'TAx CODE §351.101(a)(3) and (a)(4) authorize the expenditure of
municipal hotel tax revenues for advertising and promotional programs to attract tourists to the
municipality or its vicinity, and in the promotion, improvement and application of the arts to
promote tourism and the convention and hotel industry; and
1 . 1
- 0 1 1
is-w-ar 9 —4 1 0 9
I- ----
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, CITY and MARKET agree and contract as follows:
1.1 Consideration. For and in consideration of the activities to be performed by MARKET
under this Agreement, CITY agrees to pay to MARKET a portion of the hotel tax revenue collected
by CITY at the rates and in the manner specified herein (such payments by CITY to MARKET
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 all 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 1 f the tax revenue by the taxpayer.
IIWWMMI� fi
(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 3 I't, June 301h,
September 3 O and December 3 1 " of each contract year.
(b) in return for satisfactory performance of the activities set forth in this Agreement
f+ attachments hereto, CITY shall pay to MARKET an amount of money in each contract
year equal to the lesser amount of. Forty-Nine Hundredths percent (0.49%) of the annual base
payment amount, or the fixed contract amount of Ten Thousand Five Hundred Dollars ($10,500).
This amount will be paid in one lump sum after the 251h of January 2016. If CITY's Chief
Financial Officer determines that hotel tax receipts by the CITY are not meeting the anticipated
budget projection, CITY may reduce MARKET's current budget at any time during the contract
period. 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.
La� 07-un ffica=
(a) The ftmding 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 MARKET.
(b) It is expressly understood that this contract in no way obligates the General Fund or any
other monies or credits of CITY.
SM32 =--
(c) CITY may withhold finther allocations if CITY determines that MARKET'S
expenditures deviate materially from their approved budget.
• 0
R WV' 1
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.
2.3 Specific Restrictions on Use of Funds.
(a) That portion of total administrative costs of the MARKET for which hotel tax funds
may be used shall not exceed that portion of the MARKET's administrative costs actually incurred
in conducting the activities specified in T2.1 above.
(b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct
an activitrA the pri i-a-vzh
the convention and hotel industry or the performance of the person's job in an efficient and
professional manner.
11 Pill 1! 1 1111, In I ► 313 1 ORM
3.1 Budget.
MEMO=
MARKET any hotel tax revenues as set forth in Section I of this contract during any program year
HoMMI-No =m
MOW, - "I ON am
kal creaLes a ItLIC11,1-3, 11VJ, I WILLI rrNPUUL--y#1 U10 unca nti rnrn"] ulu 1 :7"F-z&0
to MARKET under this Agreement. MARKET shall expend hotel tax fimds only in the manner ani,
ifor the purposes specified in this Agreement, TEX. TAX CODE §351.101(a) and in the budget as
approved by CITY.
3.2 Separate Accounts. MARKET shall maintain any hotel tax ftmds paid to MARKET 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.
3.5 Notice of Meetings. MARKET shall give the City Manager of CITY, or his designate,
reasonable advance written notice of the time and place of all meetings of MARKET's Board of
Directors, as well as any other meeting of any constituency of MARKET, at which this Agreement
or any matter subject to this Agreement shall be considered.
91 t r -�
4.2 Termination Without Cause.
SMMKM
ii ' 0
I i D191 w
5.4 Assignment. MARKET shall not assign this Agreement without first obtaining the written
consent of CITY.
mm
City Manager
City of Denton
215 E. McKinney
*enton, TX 76201
Vicki Oppenheim
PO Box 30507
Denton, Texas 76202
5.7 Application of Laws. All tenns, 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.
I HIO Itll RJON9414 I I oil Its) I mKodo, M - W M
EMMOOM,
,ENE=
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 remaining portions despite
any such invalidity.
5.12 Insurance. MARKET shall, at a minimum, provide insurance as follows:
1. $5,000,000 Commercial General Liability, or $5,000,000 Event Insurance, covering all
events taking place on City -owned property,
2. Statutory Workers' Compensation and Employers' Liability ($100,000 /$500,000 /$100,000)
OR an Occupational Accident Insurance program if approved by the City's Risk Manager,
and
3. $500,000 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 CITY.
IL CI.J'1: "1.1111 day of :' 201.5..
ATTEST:
THE CITY OF DENTON, TEXAS
BY
GEORGE CAi1111
CITY MANAGER
APPROVED AS TO LEGAL FORM:
t;...w .-ANITA D 1RGESS;:,..
CITY ATTORNEY
DENTON COMMUNITY MARKET, INC.
By: ------
Denton Community Market PY2016 - Page 8
KNOW11
0
Lo
FOMOT.TWOMMMMMY, M�M � � y
Seasonal Operations
Budget 2014
N 1 W A W1
Printed Matter
Contract :y¥*:
+r
Contract Labor (Sound Coordinator)
Total
�
$ 3,5011
off
\0$0