2016-375s:\legal\our documents\ordinances\16\hot funds py2017\community market oedinance.doc
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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.
• • • � • ' : •' � �
SECTION 1. The City Manager, or his designee, is hereby authorized to execute an
agreement between the City af Denton and the Denton Community Market, Inc. 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 ��� day of � ��'�..� '�, , 2016.
ATTEST:
JENNIFER WALTER5, CITY SECRETARY
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BYH � � .
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APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
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CHRIS WATTS, MAYOR
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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 accupancy tax ("hotel tax") not exceeding seven percent (7%) of the consideration paid by a
hotel occupant; and
WHEREAS, by ardinance, CITY has provided for the assessment and collection of a
municipal hotel occupancy tax in the City af Denton of seven percent (7%); and
WHEREAS, TEx. TAx CoDE §351.101(a)(3} and (a)(4) authorize the expenditure of
municipal hotel tax revenues for ,advertising and promotional programs ta attract tourists to the
municipality or its vicinity, and in the promotion, improvement and application of the arts to
pramote tourism and the convention and hotel industry; and
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1.1 Consideration. For and in consideration of the activities to be performed by MA ET
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" ar "hotel tax funds").
1.2 Amount of Payments.
(a) As used in this Agreement, the following terms shall have the following specific
meanings:
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Denton Cammunity Market HOT Funds, PY2017 - Page 1
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Denton Community Market HOT Funds, PY2017 - 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.
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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, pastcards, newsletters and print advertising.
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Denton Community Market HOT Funds, PY2017 - Page 4
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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 terrminated 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 MARKET for any contractual obligations of MA ET undertaken by
MARKET 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 cantrary, the obligation of CITY to reimburse
MA ET, or to assume the performance of any contractual obligations of MA ET, for or
under any contract entered into by MARKET as contemplated herein, shall not exceed 66 2/3%
of the current quarterly payment.
(c) Further, upon termination pursuant to ¶4.2(a), MA ET will prov�de 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 ta 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 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. MARKET will be obligated to return
any unused funds, or funds determined to be used improperly. Any use of remaining funds by
Denton Community Market HOT Funds, PY2017 - Page 5
MA ET after notificatian 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 MARKET;
(b) The insolvency of MARKET, the filing of a petition in binkruptcy, either voluntarily or
involuntarily, or an assignment by MARKET 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 MA T 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 MA T 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 ight to I ediate Ter ination 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 terrninate this Agreement upon immediate notice
to the other party in the event that any person has instituted litigation concerning the activities of the
nan-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, MA T 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.
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor
be construed to prohibit, the agreement by MA ET with anather private entity, person, or organi-
zation for the performance of those services described in ¶2.1 above. In the event that MARKET
enters into any arrangement, contractual or otherwise, with such ather entity, person ar organization,
MARKET shall cause such other entity, person, or organization to adhere to, canform ta, 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 payrnents and hotel tax funds.
5.2 Independent Contractor. MARKET 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. MARKET shall have exclusive control of its operations and performance of services
hereunder, and such persons, entities, or organizations performing the same, and MARKET shall be
Denton Community Market HOT Funds, PY2017 - Page 6
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5.4 Assignment. MARI{ET 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, ardinance, or
regulation, shall 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:
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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 Agree ent. 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 canditions of any other
document relating to thss transaction or these transactions.
Denton Community Market HOT Funds, PY2017 - Page 7
5.9 Duplicate Originals. This Agreement is executed in duplicate originals.
5.10 Headings. The headings and subheadings af the various sectians and paragraphs af 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 ward in this
Agreement, or applicatian thereof to any person or circumstance is held invalid by any caurt of
competent jurisdiction, such holding shall not affect the validity of the rernaining 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' Campensation 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 af coverage shall be submitted prior to any payment by CITY.
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ATTEST:
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.I ��` 1`�! I • �� ] ,TERS,
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THE CITY OF DENTON, TEXAS
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HOWARD ���1�� I"II�.
CITY MANAGER
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Denton Community Market HOT Funds, PY2017 - Page 8
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Denton Community Market
Program Year 2017 Budget
Advertising
Coordinator Salary
Publications
Printed Matter
Art
Coordinators Salary
Performers
Exhibit A
$ 1,400
3,500
975
$ 5,875
S 4,375
5,250
$ 9,625
Tatal Budget $ 15,500