2015-345\\codad\departments \legal \our documents \ordinances \15 \hot funds pyWfestival foundation ord.doc
ORDINANCE NO. 2015 -345
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON FESTIVAL
FOUNDATION 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 Festival Foundation 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.
I'ASSI:�nD A]:) Al'1'ROVED ll7is Iiie
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
telly o1" A��, n m..�9„ 2015.
0 1 1 S. WATTS, AYOR
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON FESTIVAL FOUNDATION (PY2016)
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 Denton Festival Foundation, Inc. a legal entity incorporated under the laws of
the State of Texas (the "FOUNDATION "):
WHEREAS, TEX. TAX CODE §351.002 authorizes the 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, 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
advertising and conducting solicitations and promotional programs to attract tourists and convention
delegates or registrants to the municipality or its vicinity; and
WHEREAS, the FOUNDATION is well equipped to perform those activities; and
WHEREAS, TEX. TAX CODE §351.101(c) authorizes the CITY to delegate by contract with
the FOUNDATION, 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, the CITY and the FOUNDATION agree and contract as follows:
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and in consideration of the activities to be performed by the
FOUNDATION under this Agreement, the CITY agrees to pay to the FOUNDATION 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 FOUNDATION 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 the 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
Festival Foundation HOT Funding PY2016 - 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 the CITY's
fiscal year. It will include hotel tax revenue due to the 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 the 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 the CITY
for which attorneys or agents effect compliance or collection of the hotel tax 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 Agreement is in force. Contract quarters will end on March 31st, June W1,
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, the CITY shall pay to FOUNDATION an amount of money in each
contract year equal to the lesser amount of Four and Twenty -Six Hundredths percent (4.26 %) of
the annual base payment amount, or the fixed contract amount of Ninety -One Thousand Three
Hundred Nine Dollars ($91,309). This amount will be divided into quarterly payments equal to
25% of the annual fixed contract amount, unless the 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 4.26% 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 the FOUNDATION'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" shall mean payments by the CITY to the
FOUNDATION of those amounts specified in ¶1.2, above, as determined by the hotel tax revenue
collected.
(b) Each quarterly payment shall be paid upon receipt of the required reports and after the
25'h 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. The CITY may withhold the quarterly payment(s) until the
appropriate reports are received and approved, which approval shall not be unreasonably withheld.
Festival Foundation HOT Funding PY2016 - Page 2
(a) The funding of this project in no way commits the CITY to future funding of this
program beyond the current contract period. Any future funding is solely the responsibility of the
FOUNDATION.
(b) It is expressly understood that this contract in no way obligates the General Fund or any
Aher monies or credits of the CITY.
(c) CITY may withhold fiirther allocations if CITY determines that FOUNDATION's
cx:IF enditures deviate materially from their approved budget.
111111111111111! 1171
(a) That portion of total administrative costs of the FOUNDATION for which hotel
funds may be used shall not exceed that portion of the FOUNDATION's administrative
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
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the convention and hotel industry or the performance of the person's job in an efficient and
professional manner.
Festival Foundation HOT Funding PY2016 - Page 3
3m 1 Budget®
request from the City Manager of the CITY, or designate, for additional information relating to the
activities performed under this 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.
4.3 Automatic Termination. This Agreement shall automatically terminate upon the
occurrence of any of the following events:
V. GENERAL PROVISIONS
Festival Foundation HOT Funding PY2016 - Page 6
5.4 Assipment. The FOUNDATION S t assign this Agreement without first obtaining
the written consent of the CITY.
City Manager
City of Denton
Ti 5 E. 1dr, I'
-FOUNDATION
W-117.73ru W" *
Carol Short
P.O. Box 2104
Denton, Texas 76202-2104
of the CITY and the FOUNDATION and their respective successors and assigns.
5.7 Appheation of Laws. All terms, conditions, and provisions of this Agreement are subje
to all applicable federal laws, state laws, the Charter of the City of Denton, all ordinances pas
pursuant thereto, and d;% y determinations relative thereto.
I T
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 remaining portions despite
any such invalidity.
5.12 Insurance. The FOUNDATION shall 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. $500,000 Liquor/Dram Shop Liability for any event occurring on City-owned
property where alcohol will be provided or served.
CITY must be named as an additional insured on all policies (except Workers' Compensation), and
proof of coverage shall be submitted prior to any payment by the CITY.
EXECUTED this w_ day of mmmmm�,n mm�w, 2015.
ATTEST:
THE CITY OF DENTON, TEXAS
• .... _ ..ww _...._wu._
Gl 0 1 i$" C �C M, 1:' E Ili i,,
CITY MANAGER
APPROVED AS TO L EG
I N IF WAUUERS,
Y t °J`A (Y , -° tITY ATTORNEY
Festival Foundation HOT Funding PY20 i - Page 8
By:
Chaiman/Director
APPROVED AS TO LEGAL FORM:
By: By:
Secretary
Festival Foundation HOT Funding PY2016 - Pap 9
Denton Arts & Jazz Festival
Brochures $6,000
Magazines %0
Newspaper & Internet %
Commercials & Photography $
T k is ,
m/1
Musicians $46,000
Site Operations 20,309
Tom| !
Total $91,309