18-1961s:\legal\our documents\ordinancesU 8\hot py2019\chamber ordinance,doc
ORDINANCE NO. 1 g-19O1
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF
COMMERCE (CONVENTION AND VISITORS BUREAU) FOR THE PAYMENT AND USE
OF HOTEL TAX REVENUE; 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 Chamber of Commerce (Convention and
Visitors Bureau) 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.
The motion to � ��� µa t��� °� ��rdinance was made b / � �� �� ,� �
y �� a� t�v y...... ���. �� and
seconded b �.�'�"���w���m�'"��'���.������____ ________.. � the Or�����rN��xb���; rn���� ���.������ x�r��� �����.����r�•a��r��,d by
d.l�a.� ����>81����,����� �r��t� � � - �� .�� �
Chris Watts, Mayor:
Gerard Hudspeth, District 1:
Keely G. Briggs, District 2:
Don Duff, District 3:
John Ryan, District 4:
Deb Armintor, At Large Place 5.
Paul Meltzer, At Large Place 6:
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Abstain Absent
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CHRIS N "� ,", MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
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BY: � ������� .� �� ���� ��� � �;'.�"�.w:��'�,� ����'���..���
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APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
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A NT N CI Y NT l�t AN T N
�F COMMERCE (CONVENTION �c VISITOR� BUREAU) (PY2019) PROVIDING FOR
THE PAYMENT AND USE OF HOTEL TAX I�VENUE
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the "CITY"}, and the Denton Chamber of Commerce (Convention 8z Visitors Bureau), a non-profit
corporation incorporated under the laws of the State of Texas (the "BUREAU"}.
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
municipai hotel occupancy tax in the City of Denton of seven percent (7%}; and
WHEREAS, TEx. TAx CoDE §351.101(a) authorizes CITY to use revenue from its
municipal hotel occupancy tax to promote tourism and the convention and hotel industry by
advertising and conducting solicitations a�►d promotional programs to attract tourists and convention
delegates or registrants to the municipality or its vicinity; and
W�-IE AS, TEx. TAx CoDE §351.101(a}(1} autharizes the expenditure of rnunicipal hotel
tax revenue for construction, improvement, enlarging, equipping, repairing, operating, and
maintaining convention center facilities managed in part by the CITY, visitor information centers,
or both; 1nd
WHEREAS, BUREAU is well equipped to perfor those activities through its Denton
Convention and Visitor's Bureau; and
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1.2 A o nt of ay ents.
(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 manies 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 hatel, pursuant to Texas Tax Cade §351.002 and City
Ordinance. Hotel tax revenue will include penalty and interest related to the late
pay ents of the tax revenue by the taxpayer.
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1.4 Other limitations regarding consideration.
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(b) It is expressly understood that this contract in no way obligates the General Fund or any
ather manies or credits of CITY.
(c} CITY may withhold further allocatians if CITY determines that BUREAU's
expenditures deviate materially from their approved budget.
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(a) Advertise and conduct salicitations and promotianal pragrams to attract
tourists and convention delegates ar registrants to the Dentan Convention
Center, including, but not limited to:
i. Marketing at the state and local level (including arket analysis,
campaign development, branding, promotion, etc.);
ii. Collecting and reporting rnetrics on marketing activity;
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iii. Sales missions developed in conjunction with the Owner's hotel sal�s
team to pre-identify and pre-qualify business-appropriate meetings for the
Property; and
iv. Partnership development to �reate collaborative opportunities with local
private, public, and non-profit sector eniities.
(b) Provide meeting, event, and pre-c�onvention services, including, bui not
limited to:
i. Conducting site visits and f'amiliarization tours for potential
clients;
ii. Customiz�d servicing for groups (registration assistance,
delegate name badge preparation, welcome packets, off-site
function arrangements, etc.); and
iii. Serving as Iiaison between meeting planner client and hotel,
loc;al business, and transportatian.
(c} Identifying, coilecting rate bids from, and securing overflov� hateis in Denton
for convention delegates.
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(b} Hotel tax funds may not be spent for travel for a person to attend an eveni or conduct
an activity the primary purpos� ofwhich is not dir�ctly related to the promotion of local tourism and
the conventian and hotel industry or the performance of the p�rson's job in an efficient and
professional manner.
Chamber CVB HOT Funds, PY2019 -- Page 4
III. C IN U NTS
3.1 Budget.
(a} U EAU shall adhere to the budget (Exhibit "A") as approved by the City Council
for each calendar year, for all operations of BUREAU funded by hotel tax revenue. In other words,
CITY should be able to audit specifically the purpase of each indivfdual expenditure of hotel tax
f'unds from the separate account relating to hatel tax funds. CITY shall not pay to BUREAU �ny
hatel 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.
(b} BUREAU acknowledges that approval of the budget (Exhibit "A") by the Denton
City Council creates a fiduciary duty in BUREAU with respect to the hotel tax funds paid by CITY
to BUREAU under this Agreement. BUREAU shall expend hotel tax funds only in the manner and
for the purposes specified in this Agreement, TEX. TAX CODE §351.1 O1(�}, and in the budget as
approved by CITY.
(c) Upan the applicatian or consent of BU EAU, the City Manager or his designate
may authorize rninor amendments to the approved budget as necessary to carry out the intent of this
Agreement, in a manner consistent with efficient use af public funds, and in accordance with 5tate
law. Such minor amendments may not increase the overall funding set forth in ¶1.2(b}, extend the
term, or otherwise alter the performance obligations of BUREAU, without approval of the City
Council by ordinance.
3.2 Separate Accounts. BUREAU shall maintain any hotel tax funds paid to BUREAU by
CITY in a separate checking account or with segregated fund accounting, such that any reasonabie
person can review the revenue source of any given expenditure.
3.3 Financial Records. BUREAU shall maintain complete and accurate financial records of
each expenditure of the hotel tax funds made by BUREAU. These funds shall be classified as
restricted funds for audited financial purposes, and may not be used for contracted services,
including, but not limited to, auditing fees and attorney fees. Upon reasonable advance written
request of the Denton City Council, the City Manager or designate, or any other person, U EAU
shall make such financial records available for inspection and review by the party making the
request. BUREAU understands and accepts that all such financial records, and any other records
relating to this Agreement shall be subject to the Public Inf'ormation Act, TEx. Gov'T CobE, ch.
552, as hereafter amended.
3. a erly e orts. After initial receipt of the hotel tax funds, and within thirty (30) days
after the end of every contract quarter, BUREAU shall furnish to CITY: (1} a completed financial
report, (2) a list of the expenditures made or copies of the invoice or receipts with regard to hotel t�
funds pursuant to T`Ex. TAx CoDE §351.101(c}, social media and/or digital marketing expenditures
require invoices to be provided and shall include perf'ormance measures, and (3) a copy of all
financial records (e.g., copies of front and back cleared checks or bank statements, and other
relevant documentation). BUREAU shall prepare and deliver all reports in a form and manner
approved by the City Manager or designate. BU AU shall respond promptly to any request from
Chamber CVB HOT Funds, PY2019 -- Page 5
the City Manager of CITY, or designate, for additional information relating to the activities
perforined under this Agreement.
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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.
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4.3 Automatic Termination. This Agreement shall automatically terminate upon the
occurrence of any of the following events:
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(b} The insolvency of BUREAU, the filing of a petition in bankruptcy, either voluntarily or
involuntarily, or an assignment by BUREAU for the benefit of creditors;
(c) The continuatian of a breach of any of the terms or conditions of this Agreement by
either CITY ar BU EAU 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 BUREAU 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.
. i t to I e iate er inatian U o iti ation. Notwithstanding any other pravision
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
ar prohibited under this Agreement.
4.5 In the event that this Agreement is te inated pursuant to ¶¶4.3 or 4.4, U AU 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.
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5.4 Assignment. BUREAU shall not assign this Agreement without first obtaining the written
consent of CITY.
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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. BUREAU 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. $250,000 Liquor/Dram Shop Liability for any event occurring on City-owned
property where alcohol will be provided or served, and
$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 �"�"u�'�,� day of ��.�`° �°:�� �'� ���'�� , 2018.
ATTEST:
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BY .. ���� � .��� " ���_����� ��`� �� �.�'���
M�i�N��l� �.,1� WALTERS,
CITY SECRETARY
THE f��'� ��'' OF I�I��;�'�'(� �, "�;���
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TOD1:� HILEMAN,
CITY MANAGER
�>'�. EGAL F4���� b��i a p�
J� 1 d��, �:.�'� 1:I:m P AS FI °�� L
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AARON LEAL,
CITY ATTORNEY
Chamber CVB HOT Funds, PY2019 -- Page 9
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Chatnb�e �V� FIC}i F'unds, F'I'2019 __ F�a�e 11