2016-374s:\legal\our documents\ordinances\16\hot funds py2017\daasf ordinance.doc
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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 African American Scholarship
Foundation, Inc. for the payment and use of hotel tax revenue, under the terms and conditions
contained in the agreement, a copy af which is attached hereto and made a part hereof.
SECTION 2. This ardinance shall become effective immediately upon its passage and
appraval.
PASSED AND APPROVED this the
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
f
�y ,
BY. �
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
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cl�fl��� wATTs. �'` �tYOR.
AG EE ENT ETWEEN T E CITY F ENT N AN
ENT N AF ICAN A E ICAN SC LA S IP F UN ATI N, INC.
(PY2017) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX
VENUE
THIS AG EMENT made between the City of Denton, Texas, a municipal corporation
(the "CITY"), and the DENTON AFRICAN AMERICAN SCHOLARSHIP FOLJNDATION,
INC., a legal entity incorporated under the laws of the State of Texas (the "AFRICAN AMERICAN
SCHOLARSHIP"}:
WHEREAS, TEx. TAx CotiE §351.002 authorizes CITY to levy by ordinance a municipal
hotel occupancy tax (66hotel t�"} 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 af a
rnunicipal 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 promate 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, AFRICAN AMERICAN SCHOLARSHIP is well equipped to perform those
activities; and
WHEREAS, TEx. Tax ConE §351.101(c) authorizes CITY to delegate by contract with
AFRICAN AMERICAN SCHOLARSHIP, as an independent entity, the management and
supervision of programs and activities of the type described hereinabove funded with revenue frorn
the municipal hotel occupancy tax;
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, CITY and AFRICAN AMERICAN SCHOLARSHIP agree and contract
as follaws:
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1.2 Amount of Payments.
(a) As used in this Agreement, the following terms shall have the following specific
meanings:
Dentan African American Schalarship HOT Funds, PY2017 - Page 1
(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.
(ii) The term 66Collection period" will mean the callection 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.
(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 ar fiscal quarter}, less: (1) attarney and auditing costs incurred during such
period 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 tax from taxpayers); and (2)
caurt costs and other expenses incurred in litigation against, ar auditing of, such t�payers.
(iv) The term "co��t�•���:-t c����irt�;r'' shq�ll r���:�� to any ��c�;��-t��- caC' �la�:: calenc:l��►� v�ar in
which this Agreement is in 1i����:e. C°�����•act ���r��rvl�,xrs will �ia� c�i� M���`�1'� 315�, .l�r��� 30th,
September 30th, 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 AFRICAN AMERICAN SCHOLARSHIP an
amount af money in each contract year equal to the lesser amaunt of: Thirty-Four Hundredths
��er���nt (0.3��"r'�� c7�4 tl��: tr����Lial base pa������,r�t amount, or the fixed ���z�t�•act amount of i Wi�1�i
�I'I�c���sand Nir7e.tiyf �3c�ll���•�, (��,000). . Th�� ����iount will be paid in one li����}� sum after the 2���' ��I"
January 2017. If CITY's Chief Financial Officer determines that hotel tax receipts ta the CITY
are not meeting the anticipated budget projection, CITY may reduce AFRICAN AMERICAN
SCHOLARSHIP's current budget at any time during the contract period. Payrnent 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 i '
(a) The term "payments" shall mean payments by CITY to AFRICAN AMERICAN
SCHOLARSHIP of those amounts specified in ¶1.2, above, as determined by the hotel tax revenue
collected.
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Denton African American Scholarship HOT Funds, PY2017 - Page 2
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(b) It is expressly understood that this contract in no way obligates the General Fund or any
other monies or credits of CITY.
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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.
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Denton African American Scholarship HOT Funds, PY2017 - Page 4
(2) a list of the expenditures or copies of the invoices or receipts made with regard to hotel taac funds
pursuant to TEx. TAx CoDE §351.101(c), and (3} a copy of all financial records (e.g., copies of front
and back cleared checks ar 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. AFRICAN AMERICAN SCHOLARSHIP shall respond promptly to any request from
the City Manager of CITY, or designate, for additianal information relating to the activities
performed under this Agreement.
3.5 Notice of eetings. AFRICAN AMERICAN SCHOLARSHIP shall give the City
Manager of CITY, or his designate, reasonable advance written notice of the time and place of all
meetings of AFRICAN AMERICAN SCHOLARSHIP 's Board of Directors, as well as any other
meeting of any constituency of AFRICAN AMERICAN SCHOLARSHIP , at which this
Agreement or any matter subject to this Agreement shall be considered.
4.1 Term. The term of this Agreement shall commence on January 1, 2017, and terminate at
midnight on January 31, 2018. However, the program period shall commence on January 1, 2017
and terminate at midnight on December 31, 2017. 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 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 ¶4.2(a), CITY
agrees to reimburse AFRICAN AMERICAN SCHOLARSHIP for any contractual obligations of
AFRICAN AMERICAN SCHOLARSHIP undertaken by AFRICAN AMERICAN
SCHOLARSHIP 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 AFRICAN AMERICAN SCHOLARSHIP, or to assume the performance of any
contractual obligations of AFRICAN AMERICAN SCHOLARSHIP, for or under any contract
entered into by AFRICAN AMERICAN SCHOLARSHIP as contemplated herein, shall not
exceed 66 2/3% of the current payment.
(c} Further, upon termination pursuant to ¶4.2(a), AFRICAN AMERICAN
SCHOLAR5HIP will provide CITY: 1} within ten (10) business days from the termination
notification, a short-terrn budget of probable expenditures for the remaining sixty (60) day period
between termination notification and contract terrnination. This budget will be presented to
Denton African American Scholarship HOT Funds, PY2017 - Page 5
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 Cade, and is within the current contractual period
approved budget; the budget will be considered appraved; 2} within thirty (30) days, a full
accounting of all expenditures not previously audited by 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. AFRICAN AMERICAN SCHOLARSHIP will be obligated to return any unused
funds, or funds determined to be used improperly. Any use of remaining funds by AFRICAN
AMERICAN SCHOLARSHIP 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 AFRICAN AMERICAN SCHOLARSHIP;
(b} The insolvency of AFRICAN AMERICAN SCHOLARSHIP, the filing of a petition in
bankruptcy, either voluntarily or involuntarily, or an assignment by AFRICAN AMERICAN
SCHOLARSHIP 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 AFR.ICAN AMERICAN SCHOLARSHIP 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 AFRICAN AMERICAN SCHOLARSHIP 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 ¶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 terminate this Agreernent 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, AFRICAN
AMERICAN SCHOLARSHIP agrees to refund any and all unused funds, or funds determined
by CITY to have been used improperly, within thirty (30) days after termination of this
Agreement.
Denton African American Scholarship HOT Funds, PY2017 - Page 6
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5.12 Insurance. AFRICAN AMERICAN SCHOLARSHIP shall, at a minimum, provide
insurance as follows:
$1,aoa,000 Co ercial General Liability or Event Insurance, covering all events taking
place on City-owned property,
Denton African American Scholarship HOT Funds, PY2017 - Page 8
2. $500,000 Liquor/Dram Shop Liability for all events occurring on City-owned praperty
where alcohol will be provided ar served.
CITY must be named as an additional insured on a11 policies (except Workers' Compensation) and
proaf of coverage shall be submitted prior to any payment by CITY.
EXECUTED this ,� day of _ w � . 2016,
ATTEST:
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B:
Y _.___ �-�_—
:f � ;�1 ° �? t V� 1 TERS,
�"�'�' �l�t°[�l� ARY
�
:
Secretary
� � ��°°°
_,�.
,� � ��� �� } �
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BY......�.� � �......... ......_ _
HOWARD MARTIN,
CITY MANAGER
,...• I� � • � •'
� � � � �
. �•
DENTON �� 1�'C�1C ,�i1� AMER.ICAN
SCHOLARSHIP FOUNDATION,INC.
:'':• 1►' � � '
Denton African American Scholarship HOT Funds, PY2017 - Page 9
Denton African American Scholarship Foundation, Inc.
Denton Black Filrr� Festival
Program Year 2017 Budget
Advertising
Social Media & Coops
Printed Matter
Billboards
Art
Speakers & Performers
Sound Equipment Rental
Exhibit A
$ 3,200
1,000
1,800
$ 6,000
$ 1,000
1,000
$ 2,000
Total6udget $ 8,000