2017-356S:\Legal\Our Documents\0rdinances\17\H0'r Funds PY2018\Denton County Ordinance.doc
ORDINANCE NO. 2017-356
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
INTERLOCAL AGREEMENT BETWEEN THE CITY OF DENTON AND DENTON
COUNTY FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE IN SUPPORT OF
THE DENTON COUNTY OFFICE OF HISTORY AND CULTURE; AND PROVIDING AN
EFFECTIVE DATE.
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 County Office of History and Culture 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 Np 1/ p.[g tjpV , 2017.
CHRIS WA]"'I'S, MAYOR.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
A,]'PROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
P
BY:
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1 ►. 1 1 1
THIS AGREEMENT . betweenDenton, r.
corporation (the "CITY"), and County of Denton, Texas, a governmental entity existing under th,;�
laws of the State of Texas, contracting on of . o
WHEREAS,Dby - a municipal
percenthotel occupancy tax ("hotel tax") not exceeding seven (7%) of the considerationpaid by a
hotel occupant;
by - CITY has provided for the assessment and collection
municipal hotel occupancy tax in the City of Denton of seven percent (7%); and
WHEREAS, TEX. TAX CODE §351.101(a) authorizes CITY to . revenue from its
municipal hotel - tourism and the convention and -
advertisini and conductini solicitations and ♦ . o;
WHEREAS, both CITY r COUNTY have a secondary - of authority , enter
Code,the Agreement as an inter -local cooperation agreement, pursuant to Chapter 791 of the Texas
Government as:Agreement is authorizedby both o . . bodies; Agreement
revenues;states the purpose, terins, rights, and duties of the contracting parties; the consideration is being paid
by CITY out of current compensationperformed are
�4museurn services" authorized under §791.003(3)(F) of the Texas Government Code, which each
party is authorized to perform
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein,d COUNTY agree and contract as follows:
1
1.1 Consideration. - .tion of the activities to be performed
underagrees o pay to COUNTY a portion of the hotel tax revenue collected
specifiedby CITY at the rates and in the manner herein (such payments by !
sometimes herein referred to as the • . payments"
1.2 Amount of Payments.
(a) As used in this Agreement, the following terms shall have the following specific
meanings:
(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 "Collection 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 tax 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 time 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) court costs and other expenses incurred in litigation against or auditing of such
taxpayers.
(iv) The term "coi,aract qL1 irter" shall i 0 Ver to any ClUki te�N- ol" 1be calenclztr year in
which this Agreement is in lc rce. Coiitract qwi l.ers will end oriMai-ch 31St, Jotle 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 COUNTY an amount of money in each contract
year equal to the lesser amount of Ten and Sixty -Four Hundredths percent (10.64%) of the
annual base payment or - fixed contract amount of -dForty-Nine
Thousand Seven Hundred Seventy -Six Dollars ($349,776). This amount will be divided into
quarterly payments equal to 25% of the annual fixed contract amount, unless CITY can show
with reasonable - base payment amountbe 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 10.64% 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 COUNTY'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.
(a) The term "quarterly payments" payments by
irmounts specified in �1.2, above, as determined by the hotel tax revenue collected.
(b) Each quarterly payment shall be paid upon receipt of the required reports and after the
25" day following 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
County HOT Funds, PY2018 -- Page 2
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.
(a) The funding of this project in no way commits CITY to future ftinding of this
program beyond the current contract period. Any future funding is solely the responsibility of
COUNTY.
(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 ftirther allocations if CITY determines that COUNTY's
expenditures deviate materially from their approved budget.
2.1 Use of Funds. For and in consideration of the payment by CITY to COUNTY of the agreed
payments of hotel tax ftinds specified above, COUNTY agrees to use such hotel tax fimds 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" of that year
shall be refunded to CITY within sixty (60) days.
Should use of ftinds also include "historical" language from statute in addition to the above
advertising category?
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.
2.2 Administrative Costs. The hotel tax ftinds received from CITY by COUNTY may be speni
for day-to-day operations, office supplies, salaries, travel expenses and other administrative costs
allowed by TEX. TAX CODE § 3 5 1. 101 (e), but only if specified in COUNTY's budget (Exhibit "A")
and each are directly attributable to work on programs, which promote tourism and the hotel an(i
convention industry, and if each promotes at least one of the six statutory purposes enumerated
within TEX. TAX CODE
MMUTIUMM
(a) COUNTY agrees to demonstrate strict compliance with the record keeping and
?,pportionment limitations imposed by TEX. TAX CODE §351.101(f) and §351.108 (c) and (d).
COUNTY shall not utilize hotel tax ftmds for any expenditure which has not been specifically
iocumented to satisfy the purposes set forth in-TI[2.1 and 2.2 above.
(b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct
an activity the primary purpose of which is not directly related to the promotion of local tourism and
the convention and hotel industry or the performance of the person's job in an efficient and
professional manner.
I
of front and back cleared checks or bank statements, and other relevant documentatioEy7u,"'OPIP
shall prepare and deliver all reports in a form and manner approved by the City Manager or
designate. COUNTY shall respond 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 Meetings. COUNTY shall give the City Manager of CITY, or his designate,
ceasonable advance written notice of the time and place of all meetings of COUNTY's
Commissioners Court, as well as any other meeting of any constituency of COUNTY 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, 2018 and terminate at
midnight on January 31, 2019. However, the program period shall commence on January 1, 2018
and terminate at midnight on December 31, 2018. 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.
(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 T4.2(a), CITY
agrees to reimburse COUNTY for any contractual obligations of COUNTY undertaken by
COUNTY in satisfactory performance of those activities specified in TT2.1 and 2.2 above and
that were approved by the Council through the budget, as noted in T3. 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 TT2.1 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
wfip 01011111 -,EAU for or under
any contract entered into by COUNTY as contemplated herein shall not exceed 66 2/3% of the
current quarterly payment.
(c) Further, upon termination pursuant to T4.2(a), COUNTY 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) 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. COUNTY will be obligated to return
any unused funds or funds determined to be used improperly. Any use of remaining funds by
COUNTY 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 TT2.1 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 ten-ninate upon th4
occurrence of any of the following events:
(b) The insolvency of COUNTY, the filing of a petition in bankruptcy, either voluntarily or
involuntarily, or an assignment by COUNTY 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 COUNTY 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 COUNTY 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 T1.3 hereof.
4.4 Right to'lmmediate 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 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 �T4.3 or 4.4, COUNT
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.
MAKM D191 01 IIA -11 0 W MMV "I
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor
be construed to prohibit, the agreement by COUNTY with another private entity, person, or
organization for the performance of those services described in T2.1 above. In the event that
COUNTY enters into any arrangement, contractual or otherwise, with such other entity, person or
organization, COUNTY 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. 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.
5.2 Independent Contractor. COUNTY 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. COUNTY shall have exclusive control of its operations and performance of services
hereunder, and such persons, entities, or organizations performing the same and COUNTY shall be
solely responsible for the acts and omissions of its directors, officers, employees, agents, and
subcontractors. COUNTY i 1, be considered . partner or joint!
COUNTY be considered nor in any manner hold itself out as an agent or official representative of
1 1; , � a 1, 1 I • I . 1 ., a
a 1
5.4 Assignment. COUNTY shall not assign this Agreement without first obtaining the written
consent of CITY.
CITY COUNTY
City Manager Peggy Riddle
CITY OF DENTON DENTON COUNTY OFFICE OF HISTORY
215 E. McKinney AND CULTURE
Denton, TX 76201 110 West Hickory
Denton, TX 76201
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 to the benefit and obligation
of CITY and COUNTY 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 thereto.
5.8 Exclusive Agreement. This Agreement contains the entire understanding and constitutes
., entire agreement between the partieso concerning the subject contained
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 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
Agreement, or application thereof to any person or circumstance is held invalid by any court of
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. COUNTY shall, at a minimum, 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' Compensation and Employers' Liability ($100,000/$500,000/
$100,000),
3. $250,000 Liquor/Dram Shop Liability for any event occurring on City -owned
property where alcohol will be provided or served, and
4. $500,000 Business Automobile Liability on any owned, non -owned or hired
vehicles.
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 CITY.
EXECUTED this _Z_�Y/lday ofK� OL"' , 2017.
ATTEST:
THE CITY OF DENTON, TEXAS
By." ...
TODD HILEMAN,
CITY MANAGER
APPROVED AS TO LEGAL FORM:
By:
By:
JIT NII E. WA1. T QRS, AARON I C�'AL,
C I Y Sl ,C 1 'l'ARY;.., CITY A'1 'TOTO
County HOT Funds, PY2018 -- Page 8
ATTEST:
DENTON COUNTY OFFICE OF HISTORY
AN]
0
APPROVED AS TO LEGAL FORM:
County HOT Funds, PY2018 -- Page 9
Denton County Office of History & Culture
Denton County Museums
Program Year 2018
Exhibit A
Advertising
Magazines, Newspapers & Digital Media $ 10,000
Visitors Guide 1,000
Brochures 3,000
$ 14,000
Historical
Contract Labor $ 40,000
Archival Supplies 10,000
New Exhibit Supplies 18,000
Historical Park awnings and electrical 195,276
Restoration of Taylor Log Cabin & Reconstruction of Barn 41,000
Restoration of Wood Home (Quakertown House) 31,500
$ 335,776
$ 349,776