23-2301ORDINANCE NO. 23-2301
AN ORDINANCE OF THE CITY OF DENTON 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 IN SUPPORT OF THE THIN LINE FEST; 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 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.
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval.
S e C O n d eT:y 1r1f]1 oII : JT :r 0 V b =J :r d;T : n=: a S Ir1r]!a= X d h = = = as pE: : := t prove ; I
the following vote U - A :
Aye Nay Abstain Absent
M,y„ G„„d H„d,p,th, /
Vicki Byrd, District 1 :
Brian Beck, District 2:,/
Paul Meltzer, District 3 :/
Z/
//
Joe Holland, District 4:
Brandon Chase McGee, At Large Place 5 :
Chris Watts, At Large Place 6:
PASSED AND APPROVED this the lin day of Decew\>e/2023.
ATTEST:
JESUS SALAZAR, CITY SECRETARY
g\j: p + IIB : :I
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
tBay,gnedtVSt-zINee,
Susan Keller BE::mum„~ibSuom
BY: "-="’""='““aw
Page 2 of 2
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AGREEMENT BETWEEN THE CITY OF DENTON AND
TEXAS FILMMAKERS CORPORATION (PY2024)
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 Texas Filmmakers’ Corporation, a legal entity incorporated under the laws of the
State of Texas (the “CORPORATION”) :
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, CORPORATION is well equipped to perform those activities; and
WHEREAS, TEX. TAX CODE §351.101(c) authorizes CITY to delegate by contract with
CORPORATION, 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 CORPORATION agree, and contract as follows:
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and in consideration of the activities to be performed by
CORPORATION under this Agreement, CITY agrees to pay to CORPORATION a portion of the
hotel tax revenue collected by CITY at the rates and in the manner specified herein (such payments
by CITY to CORPORATION sometimes herein referred to as the “agreed payments” or “hotel tax
funds”)
1.2 Amount of Payments.
(a)
rneanlrlgs:
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
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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 “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 st 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 CORPORATION an amount of money in each
contract year equal to the lesser amount of One and Forty-Seven Hundredths percent (1.47%) of
the annual base payment amount, or the fixed contract amount of FiftyThousand Dollars
($50,000). This amount will be divided into two payments equal to 50% 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 final payment will represent
50% of the fixed contract amount or the unpaid remainder of 1 .47% of the base payment amount,
whichever is less. The final payment will be made after the 25th of April 2023. If CITY’s Chief
Financial Officer determines that hotel tax receipts by the CITY are not meeting the anticipated
budget projection, CITY may reduce CORPORATION’s current budget at any time during the
contract period. Each 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 “payments” shall mean payments by CITY to CORPORATION of those
amounts specified in Section 1.2, above, as determined by the hotel tax revenue collected.
(b) Each payment shall be paid upon receipt of the required reports and after the 25th of
January 2023 and after the 2541 of April 2023. 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 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
CORPORATION.
(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 CORPORATION’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 CORPORATION of
the agreed payments of hotel tax funds specified above, CORPORATION 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 sixty (60) days.
Advertising materials purchased with the hotel occupancy tax funds must be targeted to reach
audience 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
CORPORATION 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
CORPORATION’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 CORPORATION for which hotel
tax funds may be used shall not exceed that portion of the CORPORATION’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. RECORDmEPiNG AND REPORTUVG REQUIREMENTS
3.1 Budget.
(a) CORPORATION shall adhere to the budget (Exhibit “A”) as approved by the City
Council for each calendar year, for all operations of CORPORATION in which the hotel tax funds
shall be used by CORPORATION. In other words, CITY may audit specifically the purpose of
each individual expenditure of hotel tax flmds from the separate account relating to hotel tax. CITY
shall not pay to CORPORATION 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) CORPORATION acknowledges that approval of the budget (Exhibit “A”) by the
Denton City Council creates a fiduciary duty in CORPORATION with respect to the hotel tax fUnds
paid by CITY to CORPORATION under this Agreement. CORPORATION shall expend hotel tax
funds only in the manner and for the purposes specified in this Agreement, TEX. TAX CODE
§35 1.101 (a) and in the budget as approved by CITY.
(c) Upon the application or consent of CORPORATION, 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
CORPORATION, without approval of the City Council by ordinance.
3.2 Separate Accounts. CORPORATION shall maintain any hotel tax funds paid to
CORPORATION 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. CORPORATION shall maintain complete and accurate financial
records of each expenditure of the hotel tax funds made by CORPORATION. These funds are
required to be classified as restricted funds for audited financial purposes, and may not be used for
contracted services, including, but not limited to, auditing fees or attorney fees. Upon reasonable
advance written request of the Denton City Council, the City Manager or their designee, or any
other person, CORPORATION shall make such financial records available for inspection and
review by the party making the request. CORPORATION understands and accepts that all such
financial records, and any other records relating to this Agreement shall be subject to the Texas
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,
CORPORATION 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.,
copies of front and back cleared checks or bank statements, and other relevant documentation).
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Both the financial and expenditure reports will be in a form either determined or approved by the
City Manager or their designee. CORPORATION 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. CORPORATION shall give the City Manager of CITY, or their
designee, reasonable advance written notice of the time and place of all meetings of
CORPORATION’s Board of Directors, as well as any other meeting of any constituency of
CORPORATION, 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 3 1, 2024. Only those expenditures authorized by Chapter
35 1 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 CORPORATION for any contractual obligations of CORPORATION
undertaken by CORPORATION 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 Section 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 CORPORATION, or to assume the performance
of any contractual obligations of CORPORATION, for or under any contract entered into by
CORPORATION as contemplated herein, shall not exceed 66 2/3% of the current quarterly
payment.
(c) Further, upon termination pursuant to Section 4.2(a), CORPORATION 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
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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. CORPORATION will be obligated to
return any unused funds, or funds determined to be used improperly. Any use of remaining funds
by CORPORATION 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 CORPORATION;
(b) The insolvency of CORPORATION, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an assignment by CORPORATION 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 CORPORATION 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 CORPORATION 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 Sections 4.3 or 4.4,
CORPORATION 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, GENERAT I PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor
be construed to prohibit, the agreement by CORPORATION with another private entity, person, or
organization for the performance of those services described in Section 2.1 above. In the event that
CORPORATION enters into any arrangement, contractual or otherwise, with such other entity,
person or organization, CORPORATION 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. CORPORATION shall operate as an independent contractor as
to all services to be performed under this Agreement and not as an officer, agent, servant, or
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employee of CITY. CORPORATION shall have exclusive control of its operations and
performance of services hereunder, and such persons, entities, or organizations performing the
same, and CORPORATION shall be solely responsible for the acts and omissions of its directors,
officers, employees, agents, and subcontractors. CORPORATION shall not be considered a partner
or joint venturer with CITY, nor shall CORPORATION be considered, nor in any manner hold
itself out as, an agent or official representative of CITY.
5.3 Indemnification. CORPORATION AGREES TO INDEMNIFY, HOLD
HARMLESS, 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 CORPORATION 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 CORPORATION, ITS OFFICERS,
EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES., OR ANY
FEES, FINES OR PENALTIES ASSESSED AGAINST CITY DUE TO MISUSE OF FUNDS
BY CORPORATION.
5.4 Assignment. CORPORATION 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 CORPORATION
City Manager
CITY OF DENTON
215 E. McKinney
Denton, TX 76201
Joshua Butler - President
TEXAS FILMMAKERS CORPORATION
1501 S. Loop 288, Suite 104, PMB 147
Denton, Texas 76205
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 CORPORATION 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 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,
which are not fully expressed herein. The terms and conditions of this Agreement shall prevail,
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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 s 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. CORPORATION shall 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,
$500,000 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 CORPORATION by the CITY.
12th December
EXECUTED this - day of 2023.
THE CITY OF DENTON, TEXAS
/DoeuSlgned by:
by:
SMA H+q&#BY: L 5216rnvnnn411
SARA HENSLEY, CITY MANAGER
TEXAS FILMMAKERS’ CORPORATION
DocuSlgned by:
B„:Leik.“
President
ATTEST:
JESUS SALAZAR, CITY SECRETARY
B y : [J15eLSAM)ap
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+
THIS AGREEMENT HAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational obligations
and business terms.
APPROVED AS TO LEGAL FORM:
MACK RErNWAND, CITY ATTORNEY
Jessica Williams
PRINTED NAMESIGNATURE
Chief Financial Officer
TITLE
Finance
DEPARTMENT
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q
Exhibit A
Texas Filmmakers Corporation
Thin Line Fest
Budget 2024
Advertising
Regional Publications
Radio/TV
eBillboards
Digital
15,000
$ 5,000
2,000
$ 10,000
subtota I $ 32,000
Art
Campus Theatre Rental
Campus Theatre Equipment
Rental
Center for Visual Arts Rental
Photography Art Panels
Badge Printing
Photo Printing
Photo Awards
2,000
2,500
1,000
2,500
3,000
4,000
3,000
$
su btotal $ 18,000
Total Budget $ 50,000
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