22-2604ORD[NANCE NO. 22-2604
AN ORD[NANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER TOEXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND DENTONCOUNTY FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE IN SUPPORT OF
THE DENTON COUNTY MUSEUMS; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the CITY must use revenue from its municipal hotel occupancy tax to promote
tourism and the convention and hotel industry including advertising and conducting solicitations
and promotional programs to attract tourists and convention delegates or registrants to the
municipality, or its vicinity; and
WHEREAS, HOT funds may be used for historical restoration and preservation projects
or activities or advertising and conducting solicitations and promotional programs to encourage
tourists and convention delegates to visit preserved historic sites or museums; and
WHEREAS, the Woods House is a historical site and the County is administering a
historical restoration and preservation project for the Woods House and HOT Funds paid by theCity would be used by the county for this project as outlined in the agreement; NOWTHEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager, or designee, is hereby authorized to execute an
agreement between the City of Denton and Denton County for the payment and use of hotel taxrevenue, 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 approve this Ordinance was made by eytXIVkW\ QNK£W6e£ and””"d'd !'y Vial By& ; th' O'di"'"” w” p””d '"d 'ppr'v'd bythe following vote []- - ILI :’
M LVJa r Abstain Absent
Gerard Hudspeth, Mayor:\/
1/
b/
Vicki Byrd, District 1 :
Brian Beck, District 2:
Jesse Davis, District 3 :,/
VACANT, District 4:
Brandon Chase McGee, At Large Place 5 :V/
Chris Watts, At Large Place 6:
PASSED AND APPROVED thi, th, \Uk d,y ,f 3lv\yeaR . 2023.
C „#/X –GERARD HUDSPETH, MAYOR
ATTEST :
ROSA RiOS, CITY SECRETARY
BY
MACK REFNW AND, CITY ATTORNEYAPPROVED AS TO LEGAL FORM:
Page 2 of 2
AGREEAmNT BETWEEN THE CITY OF DENTON AND DENTON COUNTY, TEEiS(DENTON COUNTY OFFICE OF HISTORY AND CULTURE) PY 2023) PROVIDUqGFOR Tm PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the “CIW’), and County of Denton, Texas, a governmental entity existing under the laws of the
State of Texas, contracting on behalf of its Office of History and Culture (collectively, the“cowrY’).
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 assessment and collection of a
municipal hotel occupancy tax in the City of Denton of seven percent (7%); and
WHEREAS, TEX. TAX CODE §351.101(a) authorizes CIFY to use revenue from its
municipal hotel occupancy tax to promote tourism and the convention and hotel industry by
advertising and conducting solicitations and promotional programs to attract tourists and convention
delegates or registrants to the munidpality, or its vicinity; and
WHEREAS, TEX. TAX CODE §351.101(c) authorizes CITY to delegate by contract with
COUIVFY, as an independent entity, the management and supervision of programs and activities of
the type described hereinabove nrnded with revenue from the municipal hotel occupancy tax;
WHEREAS, both CITY and COUNTY have a secondary source of authority to enter into
the Agreement as an inter-local cooperation agreement, pursuant to Chapter 791 of the Texas
Government Code, as: the Agreement is authorized by both governmental bodies; the Agreement
states the purpose, terms, rights, and duties of the contracting parties; the consideration is being paidby CITY out of current revenues; the compensation is fair; and the services to be performed are
“museum sen'ices” authorized under §791.003(3)(F) of the Texas Government Code, which each
party is authorized to perform individually;
NOW THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, CITY and COUNTY agree and contract as follows:
L HOTEL TAX REVENUE PAYBmNT
1.1 Consideration. For and in consideration of the activities to be performed by COUNTY
under this Agreement, CITY agrees to pay to COUNTY a portion of the hotel tax revenue collectedby CITY at the rates and in the manner specified herein (such payments by CITY to COUNTY
sometimes herein referred to as the “agreed payments” or “hotel tax funds”).
1.2 Amount of Payments.
(a)
meanIngs
As used in this Agreemen\ the following terms shall have the following specific
County Dfc of H&C HOT Funds, PY2023 -- Page 1 of 10
(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%) ofthe 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 2:2nd 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) oourt 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 31st, June 30th,
September 30th, and December 3 1;t 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 Seven and Ninety-Eight Hundredths percent (7.98%) of the
annual base payment amounl or the fixed contract amount of Two Hundred Forty Thousand
Dollars ($240,000). 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 annualbase 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
7.98% 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,
1.3 Dates of Payments.
(a) The term “quarterly payments” shall mean payments by CITY to COUIVFY of those
amounts specified in 11.2, 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
25th 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 Ofc of H&C HOT Funds, PY2023 -- Page 2 of 10
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.
1.4 Other limitations regarding consideration.
(a) The funding of this project in no way commits CITY to future funding of this
program beyond the current contract period. Any future funding is solely the responsibility ofCOUNTY.
(b) it is expressly understood that this contract in no way obligates the General Fund or anyother monies or credits of CITY.
(c) CITY may withhold further allocations if CITY determines that COUNTY’s
expenditures deviate materially from their approved budget.
n USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and in consideration of the payment by CITY to COUNTY of the agreed
payments of hotel tax funds specified above, COUNTY agrees to use such hotel tax 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 3 1;t of that year
shall be refLmded to CFFY within thirty (30) 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 to, signs,
posters, postcards, newsletters, print advertising, digital marketing, billboards, radio and television.
2.2 Administrative Costs. The hotel tax funds received from CITY by COUNTY may be
spent for day-to-day operations, office supplies, salaries, travel expenses and other administrative
costs allowed by TEX. TAX CODE 6351.101 (e), but only if specified in COUNTY’s budget attached
hereto as Exhibit “ A“ and incorporated herein for all purposes and each are directly attributable to
work on programs, which promote tourism and the hotel and convention industry, and if each
promotes at least one of the six statutory purposes enumerated within TEX. TAX CoDE §35 1.101 (a).
2.3 Specific Restrictions on Use of Funds.
(a) COUNTY agrees to demonstrate strict compliance with the record keeping and
apportionment limitations imposed by TEX. TAX CODE §351.101(f) and §351.108 (c) and (d).
COWFY shall not utilize hotel tax funds for any expenditure which has not been specifically
documented to satisfy the purposes set forth in 112.1 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.
County Ofc of H&C HOT Funds, PY2023 – Page 3 of 10
m RECORDKEEPFVG AND REPORTUtG REQUmEMENTS
3.1 Budget.
(a) COUNTY shall adhere to the budget (Exhibit “ A”) as approved by the City Council
for each calendar year, for all operations of COUNTY funded by hotel tax revenue. In other words,
CITY should be able to audit specifically the purpose of each individual expenditure of hotel tax
funds from the separate account relating to hotel tax funds. CITY shall not pay to COUNTY 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.
(b) COUNTY acknowledges that approval of the budget (Exhibit “ A”) by the Denton
City Council creates a fiduciary duty in COUNTY with respect to the hotel tax funds paid by CITY
to COUNTY under this Agreement. COUNTY shall expend hotel tax funds only in the manner andfor the purposes specified in this Agreemen\ TEX. TAX CoDE §351.101(a), and in the budget as
approved by CITY,
(c) Upon the application or consent of COUNTY, the City Manager or designee may
authorize minor amendments to the approved budget as necessary to carry out the intent of this
Agreement, in a manner consistent with eflicient use of public funds, and in accordance with State
law. Such minor amendments may not increase the overall funding set forth in 11.2(b), extend the
term, or otherwise alter the performance obligations of COU]VFY, without approval of the City
Council by ordinance.
3.2 Separate Accounts. COUNTY shall maintain any hotel tax funds paid to COUiVFY by
CITY in a separate checking account or with segregated fund accounting, such that any reasonable
person can review the revenue source of any given expenditure,
3.3 Financial Records. couNrY shall maintain complete and accurate financial records of
each expenditure of the hotel tax funds made by COUNTY. These funds shall be classified asrestricted 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 designee, or any other person, COUNTY
shall make such financial records available for inspection and review by the party making the
request. COUVFY understands and accepts that all such financial records, and any other records
relating to this Agreement shall be subject to the Public Information Act, TEX. Gov’T CODE, ch.
552, as hereafter amended.
3.4 Quarterly Reports. After initial receipt of the hotel tax funds, and within thirty (30) days
after the end of every contract quarter, COUNtY 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 tax
funds pursuant to TEX. TAX CODE §351.101(c), social media and/or digital marketing expenditures
require invoices to be provided and shall include performance measures, and (3) a copy of all
financial records (e.g. , copies of front and back cleared checks or bank statements, and otherrelevant documentation). COUNTY shall prepare and deliver all reports in a form and manner
approved by the City Manager or designee. COUNTY shall respond promptly to any request from
County Ofc of H&C HOT Funds, PY2023 – Page 4 of 10
the City Manager of CITY, or designee, for additional information relating to the activities
performed under this Agreement.
3.5 Notice of Meetings. COUNTY shall give the City Manager of CFTY, or designee,
reasonable advance written notice of the time and place of all meetings of COUNrY’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.
IV. TERM AND TERMDqATION
4.1 Term. The term of this Agreement shall commence on January 1, 2023 and terminate at
midnight on January 31, 2024. However, the program period shall commence on January 1, 2023
and terminate at midnight on December 31, 2023. 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, unencumbered or unspent funds
shall be forfeited to CITY upon termination of this Agreement. Eligible expenditures encumbered
by December 3 1, 2023 shall be expended and reported in the last month of the contract, January 31,2024
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 14.2(a), CITY
agrees to reimburse COU]VFY for any contractual obligations of COUNTY undertaken byCOUNTY in satisfactory performance of those activities specified in IP. 1 and 2.2 above and
that were approved by the Council through the budget, as noted in 13 .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 112.1 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
COUNtY or to assume the performance of any contractual obligations of BUREAU 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 14.2(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 beconsidered 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
County Ofc of H&C HOT Funds, PY2023 – Page 5 of 10
all expenditures and tax funds on the day of termination, COUNTY will be obligated to returnany 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 ll2. 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 terminate upon the
occurrence of any of the following events
(a) The termination of the legal existence of COUNTY;
(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 11.3 hereof.
4.4 Right to Immediate 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 114.3 or 4.4, COUWY 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.
V. GENERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor
be construed to prohibil the agreement by comFY with another private entity, person, or
organization for the performance of those services described in l2. 1 above. In the event that
COUIVfY 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, agenl servant, or employee of
County afc of H&C HOT Funds, PY2023 – Page 6 of 10
CITY. COUNTY shall have exclusive control of its operations and performance of services
hereunder, and such persons, entities, or organizations performing the same and couivrY shall be
solely responsible for the acts and omissions of its directors, officers, employees, agents, and
subcontractors. COUNTY shall not be considered a partner or joint venturer with CITY, nor shall
comFY be considered nor in any manner hold itself out as an agent or official representative ofCITY
5.3 Indemnification. TO THE EXTENT PERMITTED BY THE CONSTIFUTION ANDLAWS OF THE STATE OF TEXAS, COUNTY AGREES TO U{DEM{EFY, HOLDHARMIIESS, AND DEFEND CITY, rTS OFFICERS, AGENTS, AND EMPLOYEESFROM AND AGAHVST ANY AND ALL CLAIMS OR suns FOR HqJURIES, DAMAGE,LOSS, OR LIABDLITY OF WHATEVER KnqD OR CUARACTER, ARISUVG OUT OF ORUV CONNECTION WITH THE PERFORMANCE BY COUNTY OF THOSE SERVICESCONTEMPLATED BY TEns AGREEMENT, F{CLVDING ALL SUCH CLA]MS ORCAUSES OF ACTION BASED UPON COMMON, CONSTITUTIONAL OR STATUTORYLAW, OR BASED, UV WHOLE OR IN PART, UPON ALLEGATIONS OF NEGLIGENTOR INTENTIONAL ACTS OF COUNTY, ITS OFFICERS, EMPLOYEES, AGENTS,SUBCONTRACTORS, LICENSEES AND DWITEES.
5.4 Assignment. COUNTY shall not assign this Agreement without first obtaining the writtenconsent 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 COUNTY
City ManagerCITY OF DENTON
215 E. McKinneyDenton, TX 76201
Museum DirectorDENtON COUNTY
AND CULTURE
110 West Hickory
Denton, TX 76201
OFFICE OF FHSTORY
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
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 this Agreement,
County Ofc of H&C HOT Funds, PY2023 -- Page 7 of 10
which are not fully expressed herein. The terms and conditions of this Agreement shall prevailnotwithstanding 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
Agreemen\ 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
2
$ 1,000,000 Commercial General Liability, or $1,000,000 Event Insurance, covering
all events taking place on City-owned property,
$500,000 Business Automobile Liability on any owned, non-owned or hiredvehicles.
CITY must be named as an additional insured on all policies (except Workers’ Compensation) and
proof of coverage shall be submitted prior to any payment by CITY.
EXECUtED this a d,y of 2023
THE CITY OF DENTON, TEXAS
hIMByNSLEY,CITY MANAGER
COUNTY
al
£udge
ATTEST
ROSA RIOS, CITY SECRETARY
By:47Z
County Ofc of H&C HOT Funds, PY2023 – Page 8 of 10
APPROVED AS TO LEGAL FORM
MACK REINWAND_ CITY ATTORNEY
By :
THIS AGREENWNT HAS BEENBOTH REVIEWED AND APPROVED
as to financial and operational obligationsand business terms.
SIGNATURE 'Cassandra OgdenPRINTED NAME
Chief Financial OHrcerTITLE
Finance
DEPARTMENT
County Dfc of H&C HOT FuIxis, PY2023 – Page 9 of 10
Exhibit A
Denton County Office of History and Culture
Denton County Museums and Historical Park
Budget 2023
Advertising
Magazines
Internet/Social Media
7,000
7,000
su btotal S 14,000
Administration
Contract Labor (part-time
stafRng}$ 40,000
subtota I
Historical
Archival Supplies
Exhibits
Restoration (Woods House/African American site)
su btotal
Total Budget
$ 40,000
§ IO,000
80,000
$ 96,000
$ 186,000
$ 240,000
County Dfc of H&C HOT Funds, PY2023 -- Page 10 of 10
DENTON COUNTY
COMMISSIONERS COURT
1 1/29/2022
""'"/g,p’\bq'”
13. B.
THE ORDER:
Court Order Number
Approval to accept the grant award and to approve the Agreement between the City of Denton and Denton
County, Texas, providing for Payment and Use of 2023 Hotel Occupancy Tax Funds (HOT FUNDS) for the
Denton County Office of History and Culture in the amount of $240,000 and any appropriate action. Office of
History and Culture
$\\\bMGMotionSeconded byX
NoAbsent
YesAbstainCounty Judge
Andy Eads
Commissioner Pct No 1
Ryan Williams I
No
Y.. IAbstain
NoAbsent
Yes
Abstain
Absent
Commissioner Pct No 2
Ron Marchant
Commissioner Pct No 3
Bobbie J. Mitchell
Commissioner Pct No 4
Dianne Edmondson
YesAbstain
No
Y
Motion Carried
Other Action
OFBY a
BaPi
APPROVED AS T(Wa
horn
Pulled from Consent No Action Postponed
ATTEST:
County Clerk
Denton County Page 5 of 5 Printed on 11/21/2022
375 of 473