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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