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18-1977s:\legal\our documents\ordinancesU 8\hot py2019\texas filmmakers ord.doc ORDINANCE NO, 18-1977 AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND TEXAS FILMMAKERS' CORPORATION FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION l, The City Manager, or his designee, is hereby authorized to execute an agreement between the City of Denton and Texas Filmmakers' Corporation 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. ON 2. This ordinance shall become effective immediately upon its passage and S.E.C.T.I..... approval. �"I��� er��°��i�°��y tc� �.�a�r ���a��� �l�J� � a�����,�,^����°��� ��.�� ���<�c��l� l�Y .��.. � ��"��"�°�� ��" ��°�`����� � �re���i � _ � .... �;����r�c���� I:ay� .�� i�� ��.. ����"� _�����'��°� .�............_� ���, �)r�i»�xr��+�� �,����� ������wc� �r��� ���°�����°���r�� I�a�� l�`z�, ���lir��i���ro � ���t�, _ Chris Watts, Mayor: Gerard Hudspeth, District 1: Keely G. Briggs, District 2: Don Duff, District 3: John Ryan, District 4: Deb Arrnintor, At Large Place 5: Paul Meltzer, At Large Place 6: � � Abstain Absent PASSED AND APPROVED this the y �� �r , � �� �� �°� da of � �� � ��.� f ��� 2018. �. e.�.. . . � � �� � � F �� �� � � � _ ___ - - .....�'" ... ..... . CHRIS WATTS, MAYOR ATTEST: JENNIPER WALTERS, CITY SECRETARY � � ' � � r ��„� � � BY: .�' ����� � ���'���f�.�..� �.��..�������. � ��.��� �� J�� APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY , :f,, BY: � �°� �'� c� �: ���.�����^����.� , . � � � , � ,; , � , . # . � � . , � , � , �.1 1 I• �, ., 1 1 1 . . ' ' ,�- �- -- - r �- , � - , r. � •� . � - . • - . , - � �� , � . -�, - � r� . -� •- - '. �, . -� - . �.��,� � - ' ' � �� . ' 11 , � - r - � � � . . . �. r - � �. , � - , r - --� • - - ,- - ', � - � •_ . �, •. � . , � - r �. , r ' � • � • , - . � � �-, � - , - - . � � - � � . �, r - � •. . - � �- � � . . r- - ' , , r ' � � •r . 1 , . � - � - - - - , � . � - � • , , r • r � - � . . - � - . . � , � - � . ,� - +, • r. + r . � , r•� � � , �w+. �, , � . . � - � �. ... - r -. � �. � . � . . �,..�r. � . .• •�-� � •- � � -, . . r ' ' •r , 1 � � �� -�. - � r �'"'�'' � . . •-�- �' . . ,- . � � •- � � � t+ . � , . # - r- •- •'� - - .�� - �-• _ . . � , . �� � _ � •. •' ' , •' � �- . � • _ �_ � . - � - . � - , . r • � - r , -� - - , r •'''•' � • ,+ -- , � r . . � � i � • . i � , � � �- . � � - . - � �- �- � -, , •''•' � • : �- �. -- - .+ -- � ►. � •"'•' � • . .w � � : � -' . - - - � - -� • . . , � . , - ,- -r - - •. - � ���� •' ' •' ��� � �� � - - . - ��- - -•' � . - .��+� --, , . ��� � _��� • 1.2 Amount of Payments. (a) As used in this Agreement, the following terms shall have the following speciiic meanings: - - �,- , - - - , -� . , � � - � - -� , a - ' '� � . �. r ^ � �, . . . . � �- - ' � � - • - •, a � . �� , r - � . � - . ' , r�- , 11 . � TX Filmmakers HOT Funds, PY2019 - Page 1 Ordinance. Hatel tax revenue will include penalty and interest related to the late payments of the tax revenue by the taxpayer. (ii) The term 66Callection period99 will mean the collectian periad far CITY's fiscal year. It will include hotel tax revenue due to CITY far the relevant fiscal year and callected through the 22nd day af the month fallowing the close of the relevant fiscal year. (iii) The term 66base payment amount99 shall mean a net amaunt af money equal to the tatal hatel tax revenue collected by CITY during any relevant periad of time (i.e., fiscal year or fiscal quarter), less: (1) attarney and auditing casts incurred during such relevant period af time far casts af collectian ar auditing af hatel t�payers (attorney and auditing casts include fees paid ta attarneys ar agents nat in the regular employ of CITY for which attarneys or agents effect campliance ar callectian of the hotel tax fram 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 af the calendar year in which this Agreement is in farce. Cantract quarters will end on March 31 St, June 30�', September 30`�', and December 31St of each cantract year. (b) In return for satisfactary perfarmance af the activities set farth in this Agreement and all attachments hereta, CITY shall pay ta CORPORATION an amount af money in each contract year equal ta the lesser amaunt of Fifty-One Hundredths percent (0.51 %) af the annual base payment amount, or the fixed contract amount af Sixteen Thousand Five Hundred Sixty- Seven Dallars ($16,567). This amount will be divided inta twa payments equal ta 50% af the annual fixed contract amaunt, unless CITY can show with reasanable certainty that the annual base payment amount will be less than originally estimated far the fiscal year. The iinal payment will represent 50% of the fixed contract amaunt or the unpaid remainder af 0.51% af the base payment amount, whichever is less. The final payment will be made after the 25th af Apri12019. If CITY's Chief Financial Officer determines that hotel tax receipts by the CITY are nat meeting the anticipated budget projection, CITY may reduce CORPORATION's current budget at any time during the cantract periad. Each payment is subject to refund af any unused ar improperly expended funds fram the prior cantract period, and CITY's timely receipt af the required quarterly reparts. 1 i " (a) The term "payments" shall mean payments by CITY to CORPORATION af thase amaunts specified in ¶1.2, abave, as determined by the hatel tax revenue collected. (b) Each payment shall be paid upon receipt af the required reparts and after the 25�' af 3anuary 2018 and after the 25�' af Apri12018. If any quarterly financial report is nat received within thirty (30) days of the end of the applicable contract quarter, the recipient may be held in breach af this Agreement. CITY may withhold payment(s) until the appropriate reports are received and appraved, which approval shall not be unreasonably withheld. TX Filmmakers HOT Funds, PY2019 - Page 2 ''' � 1 • � . 1 +' � f • 1 (a) The funding of this praject in na way commits CITY ta future funding of this program beyond the current cantract periad. Any future funding is solely the respansibility af CORPORATION. (b) It is expressly understood that this cantract in no way abligates the General Fund or any ather monies or credits of CITY. (c) CITY may withhold further allocatians if CITY determines that CORPORATION's expenditures deviate materially from their appraved budget. � � . 2.1 Use of Funds. Far and in cansideratian af the payment by CITY to CORPORATION af the agreed payments af hotel tax funds specified abave, CORPORATION agrees ta use such hatel tax funds only for advertising and conducting solicitatians and pramotianal pragrams ta attract tourists and convention delegates ar registrants to the municipality or its vicinity; as authorized by TEx. TAx CoDE §351.101(a). Funds far any calendar year which are unused by midnight December 31 St af that year shall be refunded ta CITY within sixty (60) days. Advertising materials purchased with the hatel accupancy tax funds must be targeted ta reach audience outside the Denton city limits. These materials include, but are not limited to, signs, posters, pastcards, newsletters, print advertising, digital marketing, billbaards, radia and television. 2.2 Adminrstrative Costs. The hotel tax funds received from the CITY by the CORPORATION may be spent far day-ta-day aperatians, affice supplies, salaries, travel expenses, and other administrative costs allowed by TEx. TAx CovE §351.101(e), but anly if specified in CORPORATION's budget attached hereta as E�ibit "A" and incorparated herein far all purposes and each are directly attributable ta wark an pragrams which pramate taurism and the hatel and canvention industry, and if each promotes at least ane of the six statutary purpases enumerated within TEx. TAx CoDE §351.101(a). �• "• i � r . ;, ,; (a) That portian af tatal administrative costs of the CORPORATION far which hotel tax funds may be used shall nat exceed that partion af the CORPORATION's administrative casts actually incurred in conducting the activities specified in ¶2.1 above. (b) Hotel tax funds may not be spent for travel far a persan to attend an event ar conduct an activity the primary purpose of which is nat directly related to the promatian of local taurism and the conventian and hatel industry or the perfarmance af the persan's jab in an efficient and professianal manner. : ��. I ' I'I, ' ,, � � 1�. � � � TX Filmmakers HOT Funds, PY2019 - Page 3 (a) CORI'ORATION shall adhere to the budget (Exhibit 66 �g 99� as approved by the City ��� Council far each calendar year, for all operations of CORF'ORATION in which the hatel tax funds shall be used by CORPORATION. In other wards, CITY shauld be able to audit specifically the purpase af each individual expenditure of hotel tax funds from the separate account relating ta hatel tax. CITY shall nat pay to CORPORATION any hotel tax revenues as set forth in Section I af this cantract during any program year af this Agreement unless a budget for such respective pragram year has been appraved in writing by the Denton City Council, autharizing the expenditure of funds. (b) CORPORATION acknowledges that appraval af the budget (Exhibit "A") by the Dentan City Cauncil creates a fiduciary duty in CORPORATION with respect ta the hotel tax funds paid by CITY to CORPORATION under this Agreement. CORPORATION shall expend hatel tax funds only in the manner and for the purposes specified in this Agreement, TEx. TAX CODE §351.101(a) and in the budget as appraved by CITY. (c) Upon the applicatian or consent af CORPORATION, the City Manager or his designate may autharize minor amendments ta the appraved budget as necessary to carry out the intent of this Agreement, in a manner cansistent with efficient use af public funds, and in accardance with State law. Such minar amendments may nat increase the averall funding set farth in ¶1.2(b), extend the term, ar atherwise alter the perfarmance abligatians of CORPORATION, withaut appraval of the City Cauncil by ardinance. 3.2 Separate Accounts. CORPORATION shall maintain any hotel tax funds paid ta CORPORATION by CITY in a separate account ar with segregated fund accaunting, such that any reasonable persan can ascertain the revenue source of any given expenditure. 3.3 Financial Records. CORPORATION shall maintain camplete and accurate financial records of each expenditure af the hatel tax funds made by CORPORATION. These funds are required ta be classified as restricted funds far audited financial purposes, and may nat be used far cantracted services, including, but nat limited to, auditing fees ar attarney fees. Upon reasonable advance written request af the Denton City Cauncil, the City Manager ar designate, ar any ather person, CORPORATION shall make such financial recards available far inspectian and review by the party making the request. CORPORATION understands and accepts that all such financial recards, and any ather records relating to this Agreement shall be subject to the Texas Public Informatian Act, TEx. Gov'T CODE, ch. 552, as hereafter amended. 3.4 Quarterly Reports. After initial receipt of hotel tax funds, and within thirty (30) days after the end of every quarter thereafter, until all funds have been expended and reported to CITY, CORPORATION shall furnish to CITY: (1) a completed financial repart, (2) a list of the expenditures or copies of the invaices or receipts made with regard to hatel tax funds pursuant ta TEx. TAx CoDE §351.101(c), social media and/or digital marketing expenditures require invoices ta be pravided and shall include perfarmance measures, and (3) a capy af all financial records (e.g., capies af frant and back cleared checks or bank statements, and other relevant documentation). Bath the financial and expenditure reports will be in a farm either determined ar appraved by the City Manager or designate. CORPORATION shall respond pramptly to any request from the City Manager af CITY, ar designate, far additianal information relating to the activities perfarmed under this Agreement. TX Filmmakers HOT Funds, PY2019 - Page 4 3.5 Notice of Meetings. CORPORATION shall give the City Manager of CITY, ar his designate, reasanable advance written natice af the time and place of all meetings of CORPORATION's Board af Directars, as well as any other meeting af any canstituency of CORPORATION, at which this Agreement or any matter subject to this Agreement shall be considered. IV. TE AND TE INATION 4.1 Term. The term of this Agreement shall cammence an January 1, 2019, and terminate at midnight an January 31, 2020. Hawever, the program periad shall cammence an January 1, 2019 and terminate at midnight on December 31, 2019. Only thase expenditures autharized by Chapter 351 of the Texas Ta� Code and the program guidelines, which are actually incurred during the program period, for events and activities taking place within the program periad, are eligible for funding under this Agreement, and any ineligible expenditures ar unspent funds shall be forfeited ta CITY upan termination af this Agreement. 4.2 Terrninatron Without Cause. (a) This Agreement may be terminated by either party, with ar withaut cause, by giving the ather 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 ta reimburse CORPORATION far any contractual abligations of CORPORATION undertaken by CORPORATION in satisfactory performance af thase activities specified in ¶¶2.1 and 2.2 above, and that were appraved by the Cauncil thraugh the budget, as nated in ¶3.1. This reimbursement is conditioned upon such contractual abligatians having been incurred and entered inta in the gaad faith performance af thase services contemplated in ¶¶2.1 and 2.2 abave, and further conditioned upon such contractual abligatians having a term nat exceeding the full term of this Agreement. Notwithstanding any pravision hereof to the contrary, the obligatian af CITY to reimburse CORPORATION, ar to assume the perfarmance of any cantractual obligatians of CORPORATION, far ar under any cantract entered into by CORPORATION as contemplated herein, shall nat exceed 66 2/3% of the current quarterly payment. (c) Further, upon terminatian pursuant to ¶4.2(a), CORPORATION will provide CITY: 1) within ten (10) business days from the terminatian notificatian, a short-term budget af probable expenditures far the remaining sixty (60) day period between terminatian natification and contract terminatian. This budget will be presented to Council for appraval within ten (10) business days after receipt by CITY. If farmal approval is not given within ten (10) business days, and the budget daes nat contain any expenditures that wauld be prahibited by the Texas Tax Cade, and is within the current cantractual period appraved budget; the budget will be considered appraved; 2) within thirty (30) days, a full accaunting of all expenditures not previously audited by CITY; 3) within five (5) business days af a request fram CITY, a listing of expenditures that have occurred since the last required reparting period; 4) a final accaunting af all expenditures and tax funds an the day of termination. CORPORATION will be obligated ta return any unused funds, or funds determined ta be used improperly. Any use of remaining funds by CORPORATION after notification af terminatian is canditioned upon such contractual obligatians having been incurred and entered into in the goad faith performance af those services TX Filmmakers HOT Funds, PY2019 - Page 5 contemplated in ¶¶2.1 and 2.2 above, and further conditioned upon such contractual abligations having a term not exceeding the full term af this Agreement. 4.3 Automatic Terminatian. This Agreement shall automatically terminate upon the occurrence of any of the following events: , - - . . • - -., - - -, •''•' � • r, . # . � �..•'° � • _ . • , r- • ,. �, . _ � , • � . � . . . _ � , * . . �,. , � � _ ,. . # -, • - � . � � . . -. • , , # - - � � . � # . ,,.. - , - - ; • #"•'� # • �- , ! �. . - - �, -# �-, • - • , - � -. • �. . - � - ,, w, � - ,, - + �,.��°. � � � ' . . , w . - -�� � • - - -�� + � • _• - _� _� - - , �' +. . .: . -� -• . � * i • _ � ,f � _ f• � � � - ' , * . ' ' � � . - ' , -� -! � - `, 4.4 Right ta Immediate Termination Upon Litigatian. Notwithstanding any other provision of this Agreement, ta mitigate damages and to preserve evidence and issues for judicial determination, either party shall have the right to terminate this Agreement upon immediate natice 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 reasanably believes that such activities are required or prohibited under this Agreement. . _ _ . ., __ - - . -� . , � ,, , , , _�••�•. * .•- • ., �, -. . . � .-- -�, w -,-- -, r •�- ' 1 �. , _ _ , � • � . -- - . . . , .. . . • • � � i � , � '. � , . � . �, �- , • ^� • �' � �', - . * -- - i •' ''•' ' • . � _ r , - . �. � � • �. . � # . �- # . - � � . . _ �- �-• .�� _ . _ . ,; •'''•' • # . . � . . � ,_ . � . • • - - � - - �- • � � _. , • �..�. . , � . . - � ', - - �- # �, • _. . � • .• - - • � • • . � �- � - • . � � , # - . • � � � • • � -- - , . � � ' � #� • + .�� , _� - - -r, . - � � . . - . �; � � . • t' # � ` # r'; , + , - �' � _ # , . �, --• •. - , � � - , • : , � � # ! , �r-.-, . •-r- �- � . • , r',•�• [• � '' ' • 1 . ', _ _ # �_ �,. # _� �_ � � ._ . . • � , . • " .+- - � �. _ � � _. * # � �'# � � ', � . . - - ' � # � � �" . 1 . •' I�' � . , ' + . . _ - !- . ! •- � . ' f' • �. . *, �- ,+ • _ ' . � �� ���' ' � , �'- 1 _', - �� �,- � - , . � • ' � � � ' '# # ' ' � � -. ��., , � � • . '! , ,� �#'� � '� . �' �' � •- -� , i. ' TX Filmmakers HOT Funds, PY2019 - Page 6 r � _. _, � , •''•'°� �` r- � �- -� � . . - w r - � , . . + - � ` • , - � - - . - • �• , i 1','I'. 1; • � 1 1 ! 1, . � ., 1 1 , 1 1 � . . � � � � �� . , � . . . . � . . ;� . � . . ��; . . 1 !' �. I � ' 1 1" .'. �' '.' 1 1: 1' I 1 ' ' I' . ; ; �' ►� � � 1 1 � • � � . � ; . � � . � I' '� 1 • 1 �< 1 ' I 1 1 1 1 � 1' , �. . �• ,� 1 1 ; I' �. � �1 , . . 1 1 ;I' I . . ! I''I'� 1 1 ; ' ' 1 � � 1 ' � 1' 1 .' . � , ,� • • * • • � , �` . � , �' * -- - � r r . •' - �,, !, �, . ♦ �, . .! '1' � �• � . �' � •,-' - � .' . - � �' . . �, "� '. � . l'- - - ' - w, ' r . • �.�1 '• ' ,-� ' .` ' -� I . . . f '� ,' '� # • . 1 �� ' ,�1 - -� f . .:•• ' �. ' . ! � . +' "' ' � / �, !- �' • 1 , � � # r � ' � 1 i {�.. ♦.. � : , R... � � � ♦�. � .... � '�. �' �' � ► f�� . �� ' � �, � � ... �- � . 1 �; . . . . - - - . r - , r r � - - � . � - . � - - . � r� +. � , � .� - � - - . �- � � + �� , � . � - �- - . r �. *, r � . � •' ' •' � • . � - - �- - - � . • . : * � � �i . � i , . ., • � � , � � � � � �. -- - , - , - � . ' .�� .� - .�- .' . , - ', - , ' • � �' � ,� �'• . - •. -�' �• - � � . � � - - � - � � .. . . . . �, . � . -� . . � . -�� - -�� � - � � � , � � � _ - - - ,* -- - �- -- - �. - . . � � _ , _ � _ . - � . -� _ - .,�_ � -�-- , r ..-- . ,,, �. _ � r- , � • �. r - - r- � � -r �- -- � , � + - •. - - - � - . + � - � - . - � � + -- - - � - � - -r - - - - , � � � r � ' ` + - - - , • - , � , � + . ., . - � . -- - � - '- . � r � r � � �, . •� � � � � � "'` 1 � � � �. -• • • . � + TX Filmmakers HOT Funds, PY2019 - 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 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. CORPORATION shall provide insurance as follows: l. $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. 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. , 4� EXECUTED this � day of �����"� ��,_" ��`'�� J , 2018. ATTEST: THE CITY OF DENTON, TEXAS B . ���. � w� �� � � ��' � y• --��.�- � ������m� .�.,,��� ............. TOL�I� ��l���k�����d�� .......................... CITY MANAGER APPROVED AS TO LEGAL FORM: ���� , �, � � � By: _ �� �� " :m���� ����'�� ���� �"��������" ���� ., � By: �..� :1���]�l fl°#� WALTERS, CITY SECRETARY TE� � ,�,�� � {� � � �� a„��'°` �" ��, � �� �� ' "� �4,�°r` d�.����)I� LEAL, ........ ...................................... ....... 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