2016-378s:Uegal\oue documents\ordinances\16\hot funds py2017\main street ord.doc
:�: � \: \ \! � • i
. �� � . . �� • • �' � _> � �
� '' : • 1 • . f � • ''
• � • . • � • • • . ! • � ' '
.
• • • • •' '� ' � l • •' �. ' ' �'
. . �, �; , � .
■ •' ► ' • • � • ' .; •`�'
SECTION 1. The City Manager, or his designee, is hereby authorized to execute an
agreement between the City of Denton and the Denton Central Business District Association,
Inc., d/b/a Denton Main Street Association 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.
• . � . � . . . .> � �
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
,,`
�
BY: a �
___ =� - .� _
APPROVED AS TO� LEGAL Ft���;.��v -� -�--� �-�
ANITA BURGESS. �.:�'F�'''��I"I`�RNEY
.
day of . �`� ._��y .., 2016.
�.d �" ��� ,��' _..
. , �, �_
,. ,� � � ����° ._4_.°� �..�- -
�' � I� 1 � WATTS, MAYOR
� �. � R .; , ; ' ��.. , .,:: � ,;
� ' ,` ' �� � �:. � ._... � ; � � ..;: , r. , °., ,. ' � ' , ,,:.
f ', � � �: � j � , �. � I �
' ,! 1 �' '• • I 1; � . .
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the "CITY"), and the Denton Central Business District Association, Inc., a legal entity incorporated
under the laws of the State of Texas (the "ASSOCIATION"):
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 assessrnent and collection of a
municipal hotel occupancy tax in the City of Denton af seven percent (7%); and
WHEREAS, TEx. TAx CoDE §351.101(a} authorizes CITY to use revenue from its
municipal hotel occupancy tax to promote tourisrn 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
" � � • ' •' -w t�-� '�, �' •,, t - . . �
WHEREAS, TEx. TAx CoDE §351.101(c) authorizes CITY to delegate by contract with
ASSOCIATION, as an independent entity, the management and supervision of programs and
activities of the type described hereinabove funded with revenue from the municipal hotel
occupancytax;
�,' " •'' r; �- . • • ' s- � . - � . • ,- . ', , �
• � r . -� . • � ! ' "• .± -- . � • . . � a ,
1 � ' '�
1.1 Consideration. For and in consideration of the activities to be performed by
ASSOCIATION under this Agreement, CITY agrees to pay to ASSOCIATION a portion of the
hotel ta�c revenue collected by CITY at the rates and in the manner speciiied herein (such payments
by CITY to ASSOCIATION sometimes herein referred to as the "agreed payments" or "hatel taa�
funds"),
1.2 A ount of Pay ents.
(a) As used in this Agreement, the following terms shall have the following specific
meanings:
♦, , � -. + r • �' -�' . �
,
- - -� r . �, r'- � •. . . _ � _ � _ _ �. _ , � �;
- , - �. � • . ,�• . r - • . � - . . •�- . 11 . +
Main Street HOT Funds, PY2017 - 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 66Collection period99 will mean the collection period for CITY's
fiscal year. It will include hotel t� 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 bbbase payment amount99 shall mean a net amount of money equal
to the total hotel t� revenue collected by 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 tirne for costs of callection or auditing of hotel t�payers (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 hatel t� fram t�payers);
and (2) court costs and other expenses incurred in litigation against, or auditing of, such
taxpayers.
(iv) The term 66COIZ6TUCC C1UQi b1�199 shall refer to any quarter of the calendar year in
which this Agreement is in force. Contract quarters will end on March 315�, June 30tn,
September 30t�', 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 ASSOCIATION an amount of money in each
contract year equal or lesser amount of: One and Thirty-One Hundredths percent (1.31%) of the
annual base payment amount, or the fixed contract amount of Thirty Thousand Three Hundred
Sixty-Nine Dollars ($30,369). This amount will be divided into quarterly payments equal to 25%
of the annual fixed contract amaunt, unless 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 rernainder of
1.31 % 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 ASSOCIATION'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 i '
, - a . •. . ' -. •. � • ' � ' �' �
; - . •,'' •-' '� I .��' - . �' - '� f - �`- . - - - ! '- -�'
(b) Each quarterly payment shall be paid upon receipt of the required reports and after the
25th day fallowing 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. CITY may withhold the quarterly payment(s) until the
appropriate reports are received and approved, which approval shall not be unreasonably withheld.
Main Street HOT Funds, PY2017 - Page 2
` , 1 ''. 1 " 1 1• �
(a) The funding of this project in no way commits CITY to future funding of this program
beyond the current contract periad. Any future funding is solely the responsibility of
ASSOCIATION.
(b) It is expressly understood that this contract in no way obligates the General Fund or any
other monies or credits of CITY.
. • • . • . • �' - ' • • •;�
•_ � w` ., - . • .�� •' -� • �.'
Ii , 1 ;! ` '
2.1 Use of Funds. For and in consideration of the payment by CITY to ASSOCIATION of the
agreed payments of hotel tax funds specified above, ASSOCIATION agrees to use such hotel t�
funds only for advertising and conducting solicitations and promational programs to attract tourists
and convention delegates or registrants to the municipality or its vicinity; as authorized by TEx. TAx
Co[�E §351.101(a) (3). Funds for any calendar year which are unused by midnight December 315� of
that year shall be refunded to CITY within sixty (60} days.
Advertising materials purchased with the hotel accupancy tax funds must be targeted to reach
audiences outside the Denton city limits. These materials include, but are not limited to, signs,
pasters, postcards, newsletters and print advertising.
2.2 Ad inistrative Costs. The hotel taY funds received from CITY by ASSOCIATION may
be spent for day-to-day operations, office supplies, salaries, travel expenses, and other
administrative costs allowed by TEx. TAx CoDE §351.101(e), but only if specified in
ASSOCIATION's budget (Exhibit "A") and each such expenditure is directly attributable to work
on programs which promote tourism and the hotel and convention industry, and promotes at least
one of the six statutory purposes enumerated within TEx. TAx CoDE §351.101(a).
�� '. � � ,, ,
(a) That portion of total administrative costs of ASSOCIATION for which hotel tax
funds may be used shall not exceed that portian af ASSOCIATION's administrative costs actually
incurred in conducting the activities specified in ¶2.1 above.
s � ' • . • r- �- � . - � . •' • • . - � , • • �'
, . -• , •' �• -� � � -'!.-� • -r• • • • '• . ,• . +
� � . � • - � , � - �- t , - � - �- • • � . . �
� � - � , ,
Main Street HOT Funds, PY2017 - Page 3
�. � � � ( � ! , ,:... � ' i. ' � .; 1 � �.... � � ;. �
(a) AS50CIATION shall adhere to the budget (Exhibit "A") as approved by the City
Council for each calendar year, for all operations of ASSOCIATION in which the hotel taY funds
shall be used by ASSOCIATION. In other words, CITY should be able to audit specifically the
purpose of each individual expenditure af hotel tax funds frorn the separate account relating to hotel
tax funds. CITY shall not pay to ASSOCIATION any hotel tax revenues as set forth in Section I of
this contract during any program year of this Agreement unless a budget for such respective
program year has been approved in writing by the Denton City Council, authorizing the expenditure
of funds.
r�. • �.. • ' • •'� �.. . : '�. • - �.: � - �. �'�. . . � r�'�. � � . '�� •� • � �. -� �: , �: � �' s� ��.
� ' . '�. .� • : �: . � �.-' • - r; .. • '. r • �. .. � ..... � I � �� . ' � ".. ,.. � . � - � '. : + ,. '.: �, ..
•. r � r ' •�i ' � •- • . - . � . � - �- r � - ,
� • . , � • - r � � - � - -' • . - i • �
• � . . � ' r, ��" . .�• • '� �
(c) Upon the application or consent of ASSOCIATION, 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 ¶1.2(b}, extend the term, or otherwise alter the performance obligatians of ASSOCIATION,
without approval of the City Council by ordinance.
• � . � ' •, • • . . . , • - . � �. •, �
. • ` ' • r . -�. . - . • r -+ -., -� � , � ,� . .
• .� �- • . . . � • . • �- � -
3.3 Financial Records. ASSOCIATION shall maintain complete and accurate financial
records of each expenditure of the hotel tax funds made by ASSOCIATION. These funds are
required to be classified as restricted funds for audited financial purposes, and may not be used for
contracted services, including, but not limited to, auditing fees ar attorney fees. Upon reasonable
advance written request of the Denton City Council, the City Manager or designate, or any other
person, ASSOCIATION shall make such financial records available for inspection and review by
the party making the request. ASSOCIATION understands and accepts that all such financial
records, and any other records relating to this Agreement shall be subject to the Texas Public
Information Act, TEx. Gov'T CoDE, ch. 552, as hereafter amended.
� � r . � ,, . . - • • � - � � . � � . . -
� � , -. .' � . �-- •- •-� , � -�,• '�, •
• • • ' • , � . • r',- -� . . -r• � •
- �- � � �• - s - • • - r' .�- -•. • � � - , • • + ' s
•! � 1 . � • �' • .' . . - � � , . • • - • • . � r. '
• -r • •� . • � w� ,' � :� . � . r
�_ � -�• �' . •', - a- - -� • .�� r -• • . .+- r,
Main Street HOT Funds, PY2017 - Page 4
designate. AS50CIATION shall respand 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 eetings. ASSOCIATION shall give the City Manager of CITY, or his
designate, reasonable advance written notice of the time and place of all meetings of
ASSOCIATION's Board of Directors, as well as any other meeting of any constituency of
ASSOCIATION, at which this Agreement or any matter subject to this Agreement shall be
considered.
. � • . , � s . , 1 , w +'
a ; � . . 1 : r - - - . r� . •- �• , � - - • , . 1'
. � '- , , - , � + � �- - ;�- 1 • • - . �_ � _ , � _� � ,� _,
• . . •�- . • • �� • �- . . ,', -� � +
� •, . •- �� • - - . • . - , ; • . - - •; •; . �- •• . . _, ; � . �,
r • �- .• . � . . � �- � � •- � . �- � .w ,�
•r, , • • - •• -
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 ASSOCIATION for any contractual obligations of ASSOCIATION
undertaken by ASSOCIATION in satisfactory performance of thase 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 upan 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 ASSOCIATION or to assume the performance of any contractual obligations
of ASSOCIATION, for or under any contract entered into by the ASSOCIATIION as
contemplated herein shall not exceed 66 2/3% of the current quarterly payment.
(c) Further, upon termination pursuant to ¶4.2(a), ASSOCIATION 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 prahibited 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. ASSOCIATION will be obligated to
return any unused funds, or funds determined to be used improperly. Any use of remaining funds
Main Street HOT Funds, PY2017 - Page 5
by the ASSOCIATION after natification 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 conditianed 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
accurrence of any of the following events:
(a) The termination of the legal existence of ASSOCIATION;
(b) The insolvency of ASSOCIATION, the filing of a petition in bankruptcy, either
valuntarily or involuntarily, or an assignment by ASSOCIATION for the benefit of creditors;
(c) The continuation of a breach of any of the terrns or conditions of this Agreement by
either CITY or ASSOCIATION 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 ASSOCIATION 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 rght 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 terminate this Agreement 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 Agreernent is terminated pursuant to ¶¶4.3 or 4.4, ASSOCIATION
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 ASSOCIATION with another private entity, person, or
organization for the performance of those services described in ¶2.1 above. In the event that
ASSOCIATION enters into any arrangement, contractual or otherwise, with such other entity,
person or organization, ASSOCIATION shall cause such other entity, person, or organization to
adhere to, conform to, and be subject to all provisions, terms, and conditions of this Agreement and
to TEx. Ta,x CoDE ch. 351, including reporting requirements, separate funds maintenance, and
limitatians and prohibitions pertaining to expenditure of the agreed payments and hotel tax funds.
5.2 Independent Contractor. ASSOCIATION shall operate as an independent cantractor as to
all services to be performed under this Agreement and not as an officer, agent, servant, or employee
of CITY. ASSOCIATION shall have exclusive control of its operations and performance of
services hereunder, and such persons, entities, or organizations performing the same, and
ASSOCIATION shall be solely responsible for the acts and omissions af its directors, ofiicers,
Main Street HOT Funds, PY2017 - Page 6
employees, agents, and subcontractors. ASSOCIATION shall not be considered a partner or joint
venturer with CITY, nar shall ASSOCIATION be considered, nor in any manner hold itself out as,
an agent or official representative of CITY.
�• � ; • I � . '' ; � 1 1 1 �'
• � 1 1'; ! '' . . � R � � � • ' 1-
. . � . �� �■ �' �;. . ;� ;�■
� �! I , � - ' 1 I 1 ` � " • � R � ' I ���. I !
1 . , 1 , " ' 1' � : . .,� . � , � �
� � � 1 ; ' I
, �. �; • � i•; � '1 I 1; ! 1, . ��"
f' 1" :. �. � �� �. � �� ,� � 1 I
� �, �,.r �; � . � � .
I ' I R I ■• �. �
5.4 Assignment. ASSOCIATION shall not assign this Agreeinent without first obtaining the
written consent of CITY.
5.5 Notice. Any notice required to be given under this Agreement or any statute, ordinance, 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:
CITY
City Manager
CITY OF DENTON
215 E. McKinney
Denton, TX 76201
Christine Gossett
� '• ''� :
� ' � •, � !
�- ,� ., - • � •
.� �,� �,
1- ,• - , • 1
5.6 Inurement. This Agreement and each provision hereof, and each and every right, duty,
obligation, and liability set forth herein shall be binding upon and inure ta the beneiit and obligation
of CITY and ASSOCIATION and their respective successors and assigns.
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 the City of Denton, all ordinances passed
pursuant thereto, and all judicial determinations relative thereta.
5.8 Exclusive Agreement. 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 tYus 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 conditions of any other
document relating to tlus transactian or these transactions.
5.9 uplicate riginals. This Agreement is executed in duplicate originals.
Main Street HOT Funds, PY2017 - Page 7
5.10 Headings. The headings and subheadings of the various sections and paragraphs of this
Agreement are inserted merely for the purpose of canvenience and do not express or imply any
limitatian, definition, or extension of the specific terrns af the section and paragraph so designated.
5.11 Severability. If any section, subsection, paragraph, sentence, clause, phrase or ward in this
Agreement, or application thereof to any person or circumstance is held invalid by any court af
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. ASSOCIATION 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' Campensation and Employers' Liability
(�D 1 ooy�00��DJooyoOo��P d ooy000)y ��
3. $250,000 Liquar/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 day of w v a_ _, 2016.
��, ��
���"���� ���_ ��� ��
By: ,
, ,`
._.r T � � � _ ..,.a.
Ho VV tiiW 1V1L-2i� 1 11 V y
CITY MANAGER
ATTEST: APPROii�;��A"�"�`�� LEGAL FO
,
,--
� ar }
w �.�
By: �,. � �� = .... ��� � ��` � �� .�_ ..-
� �..� �
,Ir�€I�� ��� k�J�� ��1:'sl��,, � _.1.1��!f"�`A B[.�RC�],�k'��:
CITY �' a:C`��:cT `�' CITY r�1T T�)1�T�l�Y
D]j�N��'(�� CENTRAL BUSINESS DISTRICT
���,t�'��l �`�C���ON, INC. (Denton Main Street
t�;��r�ci�tic�il}
� r " �
�
� �
y. �... .�
B . c� ��m�-._�
�"t��«r��r���11�it°cc _.m _.._
Main Street HOT Funds, PY2017 - Page 8
�
� ! � R � �; � �1 �� � �� �
BY� _.m. ..m. �--------- �.s._.�. _ By:
Secretary
� , . � .,,_ ,
Denton Main Street Association
Downtown Denton Promotion & Special Events
Twlllght Tunes, Arts Antiques & Autos
Program Year 2017 Budget
Advertising
AAA Brochures
Downtown Visitor Guide
Printed Matter
Social Media Campaigns
Denton Live Ads
Billboards
Website
Postage
Contract Labor
Membership
$
Exhibit A
850
7, 244
3,000
3,500
2,000
1,750
1,750
375
9,500
400
Total Budget $ 30,369