2016-380s:\legal\our documents\ordinances\16\hot funds py2017\ntsf ord.doc
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SECTION 1. The City Manager, or his designee, is hereby authorized to execute an
agreement between the City of Denton and the Narth Texas State Fair 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.
PASSED AND APPROVED this the day of __, 2016.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
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APPROVED AS TO LEGAL FORM:
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1.2 Amount of Payments.
(a) As used in this Agreement, the following terms shall have the following
specific meanings:
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North Texas State Fair HOT Funds, PY2017 — Page 1
(ii) The term 66Collection period" will mean the collection 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 t� revenue collected by CITY during any relevant period af
time (i.e., fiscal year or fiscal quarter), less (1) attorney and auditing costs incurred
during such relevant period af time for costs of collection or auditing of hatel
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) 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 31 St,
June 30th, September 30�", and December 31St of each contract year.
(b) In return for satisfactory perfarmance of the activities set forth in this
Agreement and all attachments hereto, CITY shall pay to ASSOCIATION an amount of
money in each contract year equal to the lesser amount of Six and Forty-Five Hundredths
percent (6.45%) of the annual base payment amount, or the iixed contract amount of One
Hundred Fifty Thousand Dollars ($150,000). This amount will be divided into quarterly
payments equal to 25% of the annual fixed contract amount, 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 remainder of 6.45% of the base payment amount,
whichever is less. If CITY's Chief Financial Ofiicer 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 � '
(a) The term "quarterly payments" shall mean payments by CITY to
ASSOCIATION of those amounts specified in ¶1.2, above, as determined by the hatel tax
revenue collected.
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North Texas State Fair 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.
(c) CITY may withhold further allocations if CITY determines that
ASSOCIATION's expenditures deviate materially from their approved budget.
2.1 Use of Funds. For and in consideration of the payment by CITY to
ASSOCIATION of the agreed payments of hotel t� funds specified above,
ASSOCIATION agrees to use such hotel t� funds only for advertising and conducting
solicitations and promotional programs to attract tourists and convention delegates or
registrants to the municipality or its vicinity; as authorized by TEx. TAx CoDE §351.101(a).
Funds for any calendar year which are unused by midnight December 31 St of that year shall
be refunded to CITY within sixty (60) days.
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
ta, signs, posters, postcards, newsletters and print advertising.
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(a) That portion of total administrative costs of the ASSOCIATION for which
hotel tax funds may be used shall not exceed that portion of the ASSOCIATION's
administrative costs actually incurred in conducting the activities specified in ¶2.1 above.
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North Texas State Fair HOT Funds, PY2017 — Page 4
respond promptly to any request from the City Manager of CITY, or designate, for
additional inforrnation relating to the activities performed under this Agreement.
3.5 Notice of Meetings. 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 af any constituency of
ASSOCIATION, at which this Agreement or any matter subject to this Agreement shall be
considered.
4.1 Term. The terrn of this Agreement shall commence on January 1, 2017, and
terminate at midnight on January 31, 2018. However, the program period shall cornmence
on January 1, 2017 and terminate at midnight on December 31, 2017. Only those
expenditures authorized by Chapter 351 af 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 Ter ination 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 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 abligations 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 ASSOCIATION or to assume the performance of any contractual
abligations of ASSOCIATION, for ar under any contract entered into by
ASSOCIATION 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 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)
Narth Texas State Fair HOT Funds, PY2017 — Page 5
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 by
ASSOCIATION after notification of termination is conditioned upon such contractual
abligatians 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 Auto atic Ter rnation. This Agreement shall automatically terminate upon the
occurrence of any of the following events:
(a) The termination of the legal existence of ASSOCIATION;
(b) The insolvency af ASSOCIATION, the filing of a petition in b ptcy, either
voluntarily or involuntarily, or an assignrnent by ASSOCIATION 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 ASSOCIATION for more than thirty (30) days after written notice of
such breach is given to the breaching party by the ather 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 ta the beginning af 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 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 Agreement 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 perfarmance 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
ather entity, person, or organization to adhere to, conform to, 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 payments and hotel tax funds.
North Texas State Fair HOT Funds, PY2017 — Page 6
5.2 Independent Contractor. ASSOCIATION shall operate as an independent
contractor as to all services to be performed under this Agreement and not as an afficer,
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 of its directors, officers, employees, agents, and subcontractors.
ASSOCIATION shall not be considered a partner or joint venturer with CITY, nor shall
ASSOCIATION be considered, nor in any manner hold itself out as, an agent or official
representative af CITY.
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5.4 Assignment. ASSOCIATION 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,
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 ta
the respective parties as follows:
CITY
City Manager
CITY OF DENTON
215 E. McKinney
Denton, TX 76201
Glenn Carlton
NORTH TEXAS STATE FAIR
ASSOCIATION
P. O. Box 1695
Denton, TX 76202
5.6 Inure ent. This Agreement and each provision hereof, and each and every right,
duty, obligation, and liabiliiy set forth herein shall be binding upon and inure to the benefit
and abligation 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 ta all applicable federal laws, state laws, the Charter of the City of Denton, all
ordinances passed pursuant thereto, and all judicial determinations relative thereto.
North Texas State Fair HOT Funds, PY2017 — Page 7
5.8 Exclusive Agreernent. This Agreement contains the entire understanding and
constitutes the entire agreement between the parties hereto concerning the subject matter
cantained herein. There are no representations, agreements, arrangements, or
understandings, oral or written, express ar 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 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 Agreernent, or application thereof to any person or circumstance is held invalid by
any caurt of competent jurisdictian, such holding shall not affect the validity of the
remaining portians of this Agreement, and the parties hereby declare they wauld have
enacted such remaining portions despite any such invalidity.
5.12 Insurance. ASSOCIATION shall, at a minimum, pravide 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
��D 1 00'oOo��DJOoyooO��D 100y0o0}y a.ilU
3. $250,000 Liquor/Dram Shop Liability for any event occurring on City-
owned property where alcohol will be pravided 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 _r _� , 2016.
THE CITY OF DENTON, TEXAS
�
By�
�����'�r� ,�-.'�' � �" � �-`.'�
HOWARD MARTIN, ��`
CITY MANAGER
North Texas State Fair HOT Funds, PY2017 — Page 8
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C` - Y 5�::�'4 `�"ARY CITY ATTORNEY
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President
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North Texas State Fair HOT Funds, PY2017 — Page 9
North Texas State Fair Association
North Texas State Fafr & Rodeo
Program Year 2017 Budget
Advertising
Internet
Radio
Hispanic Radio
Newspaper & Magazine
Billboards
Television
Marketing/Advertising Salary
Exhibit A
10,000
40,000
10,000
5,000
13,000
22,000
50,000
Total Budget $ 150,000