23-2303ORDINANCE NO. 23-2303
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER TO
EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON
CHAMBER OF COMMERCE, INC., (DISCOVER DENTON) FOR THE PAYMENT AND
USE OF HOTEL TAX REVENUE IN SUPPORT OF THE DOWNTOWN AMBASSADOR
PROGRAM; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, TEX. TAX CODE §351.101(a) authorizes the CITY 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 municipality or its vicinity; and
WHEREAS, TEX. TAX CODE §351.101 (c) authorizes the CITY to contract with independent
entities, for programs and activities of the type funded with revenue from the municipal hotel
occupancy tax; and
WHEREAS, the agreements and amounts have been reviewed and approved by the
Community Partnership Committee and the City Council deems use of the funds are in the public
interest; NOW THEREFORE
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 the Denton Chamber of Commerce, Inc. (Discover
Denton) 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.
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the following vote B - a
Aye Nay Abstain Absent
Mayor Gerard Hudspeth:
Vicki Byrd, District 1 :
Brian Beck. District 2:
Paul Meltzer. District 3 :
Joe Holland. District 4:
Brandon Chase McGee, At Large Place 5 :
Chris Watts, At Large Place 6:
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, 2023.PASSED AND APPROVED this the IZ\---' day of Dean.bc/
GERARDIiJDb
ATTEST:
JESUS SALAZAR, CITY SECRETARY L\\\\ItII if I//
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
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Susan Keller :WWW’
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AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON BLACK CHAMBER OF COMMERCE, INC. (PROGRAM YEAR 2024)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the “CITY”), and the Denton Black Chamber of Commerce, Inc., a legal entity existing under the
laws of the State of Texas (the “CHAMBER’).
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 CITY 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 municipality or its vicinity; and
WHEREAS, CHAMBER is well equipped to perform those activities; and
WHEREAS, TEX. TAX CODE §351.101 (c) authorizes CITY to delegate by contract with
CHAMBER, as an independent entity, the management and supervision of programs and activities
of the type described hereinabove funded with revenue from the municipal hotel occupancy tax;
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, CITY and CHAMBER agree, and contract as follows:
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and in consideration of the activities to be performed by CHAMBER
under this Agreement, CITY agrees to pay to CHAMBER a portion of the hotel tax revenue
collected by CITY at the rates and in the manner specified herein (such payments by CITY to
CHAMBER, sometimes herein referred to as the “agreed payments” or “hotel tax funds”).
1.2 Amount of Payments.
(a)
rrleanlrlgs:
As used in this Agreement, the following terms shall have the following specific
(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.
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(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 “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 lst 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 CHAMBER an amount of money in each contract
year equal to the lesser amount of One and Seventy-Seven percent (1.77%) of the annual base
payment amount, or the fixed contract amount of Sixty Thousand Dollars ($60,000). 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 1.77% 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
CHAMBER’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 CHAMBER of
those amounts specified in Section 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 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 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.
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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 of
CFLAMBER.
(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 CHAMBER’s
expenditures deviate materially from their approved budget.
II. USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and in consideration of the payment by CITY to CHAMBER of the
agreed payments of hotel tax funds specified above, CHAMBER 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 well as the promotion of
tourism through the encouragement, promotion, improvement, and application of the arts, including
instrumental and vocal music, dance, drama, folk art, creative writing, architecture, design and
allied fields, painting, sculpture, photography, graphic and craft arts, motion pictures, radio,
television, tape and sound recording, and other arts related to the presentation, performance,
execution, and exhibition of these major arts forms, 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 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 the CITY by the CHAMBER
may be spent for day-to-day operations, office supplies, salaries, travel expenses, and other
administrative costs allowed by TEX. TAX CODE §351.101 (e), but only if specified in CHAMBER’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) That portion of total administrative costs of the CHAMBER for which hotel tax
funds may be used shall not exceed that portion of the CHAMBER’s administrative costs actually
incurred in conducting the activities specified in Section 2.1 above.
(b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct
an activity except where such travel is directly related to the performance of the person’s job in an
efficient and professional manner and the primary purpose of which is directly related to the
promotion of local tourism and the convention and hotel industry.
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III. RECORDiaEPiNG AND REPORTING REQUIRENmNTS
3.1 Budget.
(a) CHAMBER shall adhere to the budget (Exhibit 'W’) as approved by the City
Council for each calendar year, for all operations of CHAMBER funded by hotel tax revenues. In
other words, CITY may 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 CHAMBER any
hotel tax revenues as set forth in Section 1 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) CHAMBER acknowledges that approval of the budget (Exhibit “A”) by the Denton
City Council creates a fiduciary duty in CHAMBER with respect to the hotel tax funds paid by
CITY to CHAMBER under this Agreement. CHAMBER shall expend hotel 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 approved by CITY.
(c) Upon the application or consent of CHAMBER, the City Manager or their designee
may authorize minor amendments to the approved budget as necessary to carry out the intent of this
Agreement, in a manner consistent with efficient use of public funds, and in accordance with State
law. Such minor amendments may not increase the overall funding set forth in Section 1.2(b),
extend the term, or otherwise alter the performance obligations of CHAMBER, without approval of
the City Council by ordinance.
3.2 Separate Accounts. CHAMBER shall maintain any hotel tax fUnds paid to CHAMBER by
CITY in a separate account, or with segregated fund accounting, such that any reasonable person
can ascertain the revenue source of any given expenditure.
3.3 Financial Records. CHAMBER shall maintain complete and accurate financial records of
each expenditure of the hotel tax funds made by CHAMBER. 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 their designee, or any other person,
CHAMBER shall make such financial records available for inspection and review by the party
making the request. CHAMBER 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 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,
CHAMBER shall furnish to CITY: (1) a completed financial report, (2) a list of the expenditures or
copies of the invoices or receipts made 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., front and back
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copies of cleared checks or bank statements, and other relevant documentation). Both the financial
and expenditure reports will be in a form either determined or approved by the City Manager or
their designee. CHAMBER shall respond promptly to any request from the City Manager of CITY,
or their designee, for additional information relating to the activities performed under this
Agreement.
3.5 Notice of Meetings. CHAMBER shall give the City Manager of CITY, or their designee,
reasonable advance written notice of the time and place of all meetings of CHAMBER’s Board of
Directors, as well as any other meeting of any constituency of CHAMBER, at which this
Agreement or any matter subject to this Agreement shall be considered.
IV. TERM AND TERMINATION
4.1 Term. The term of this Agreement shall commence on January 1, 2024 and terminate at
midnight on January 31, 2025. However, the program period shall commence on January 1, 2024,
and terminate at midnight on December 31, 2024. 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 this Agreement.
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 Section 4.2(a),
CITY agrees to reimburse CHAMBER for any contractual obligations of CHAMBER
undertaken by CHAMBER in satisfactory performance of those activities specified in Sections
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 obligations having been incurred and
entered into in the good faith performance of those services contemplated in Sections 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 contrary, the
obligation of CITY to reimburse CHAMBER or to assume the performance of any contractual
obligations of CHAMBER for or under any contract entered into by CHAMBER as
contemplated herein shall not exceed 66 2/3% of the current quarterly payment.
(c) Further, upon termination pursuant to Section 4.2(a), CHAMBER 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 the City; 3) within five (5) business days of a request from CITY, a listing
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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. CHAMBER will be obligated to
return any unused funds or funds determined to be used improperly. Any use of remaining funds
by CHAMBER 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 Sections 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 Automatic Termination. This Agreement shall automatically terminate upon the
occurrence of any of the following events:
(a)The termination of the legal existence of CHAMBER;
(b) The insolvency of CHAMBER, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an assignment by CHAMBER 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 CHAMBER 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 CHAMBER 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 Section 1.3 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 Section 4.3 or 4.4, CHAMBER
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, GENERAI I PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor
be construed to prohibit, the agreement by CHAMBER with another private entity, person, or
organization for the performance of those services described in Section 2.1 above. In the event that
CHAMBER enters into any arrangement, contractual or otherwise, with such other entity, person or
organization, CHAMBER 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.
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5.2 Independent Contractor. CHAMBER 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. CHAMBER shall have exclusive control of its operations and performance of services
hereunder, and such persons, entities, or organizations performing the same and CHAMBER shall
be solely responsible for the acts and omissions of its directors, officers, employees, agents, and
subcontractors. CHAMBER shall not be considered a partner or joint venturer with CITY, nor shall
CHAMBER be considered nor in any manner hold itself out as an agent or official representative of
CITY
5.3 Indemnincation. CHAMBER AGREES TO INDEMNIFY, HOLD lIARNrl,ESS,
AND DEFEND CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES FROM AND
AGAINST ANY AND ALL CLAIMS OR SUITS FOR INJURIES, DAMAGE, LOSS, OR
LIABILITY OF WHATEVER KIND OR CHARACTER, ARISING OUT OF OR IN
CONNECTION WITH THE PERFORMANCE BY CHAMBER OF THOSE SERVICES
CONTEMPLATED BY THIS AGREEMENT, INCLUDING ALL SUCH CLAIMS OR
CAUSES OF ACTION BASED UPON COMMON, CONSTITUTIONAL OR STATUTORY
LAW. OR BASED. IN WHOLE OR IN PART, UPON ALLEGATIONS OF NEGLIGENT
OR INTENTIONAL ACTS OF CHAMBER, ITS OFFICERS, EMPLOYEES, AGENTS,
SUBCONTRACTORS, LICENSEES AND INVITEES, OR ANY FEES, FINES OR
PENALTIES ASSESSED AGAINST CITY DUE TO MISUSE OF FUNDS BY CHAMBER.
5.4 Assignment. CHAMBER 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 to the respective parties as follows:
CITY CHAMBER
City Manager
CITY OF DENTON
215 E. McKinney
Denton, TX 76201
Chairman
DENTON BLACK CHAMBER OF
COMMERCE, INC
P. O. Box 51026
Denton, TX 76206
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 CHAMBER 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.
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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,
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 may be 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. CHAMBER shall, at a minimum, provide insurance for the term of this
Agreement 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,
$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 made to CHAMBER by the CITY.
EXECUTEDtt,i, 12th d,y of December , 2023.
THE CITY OF DENTON, TEXAS
[knuSigned bp
By: I ?:,e
SARA-}rEN-SLEY, CITY MANAGER
DuuSigned by:
k/n# £artcBy:
DENTON BLACK CHAMBER OF
COMMERCE, INC.
Chairman
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ATTEST:
JESUS SALAZAR, CITY SECRETARY
DocuSigned by:
B y : L +3:: 1 T!!a4)ar
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
THIS AGREEMENT HAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational obligations and
business terms.
Jessica Williams
PRINTED NAMESIGNATURE
Chief Financial Officer
TITLE
Finance
DEPARTMENT
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Exhibit A
Denton Black Chamber of Commerce
Denton Blues Festival
Budget 2024
Advertising
Billboards
Radio
Social Media
Print
20,000
7,000
$ 8,000
$ 3,000
$ 38,000
$ 22,000
$ 22,000
$ 60,000
subtotal
Art
Entertainers
Total Budget
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