2009-275\\codad\departtm ntsF cgahour documents\ordinances\0%hot fund\hot funds\tejas ord.doc
ORDINANCE NO. VW-''7F
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND THE TEJAS STORYTELLING
ASSOCIATION, INC. FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE; AND
PROVIDING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager, or his designee, is hereby authorized to execute an
agreement between the City of Denton and the Tejas Storytelling Association, Inc. 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.
PASSED AND APPROVED this the o3~~ day of ~WI)VW , 2009.
MARK A` BURk-G - A\ OR
r
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: I
APPROVED AS TO LEGAL FORM:
AGRF EN' BETWEEN THE CITY OF DENTON AND
TEJAS STORYTELLING ASSOCIATION, INC. 01Y2A10),
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a municipal corporation
(the "CrM, and the Texas Storytelling Association, Inc., a legal entity incorporated under the laws
of the State of Texas (the "ASSOCIATION'):
WHEREAS, TEx. TAX Cone; §351.002 authorizes CITY to levy by ordinance a municipal
hotel occupancy tax ("hotel tax") not exceeding seven percent (7 Yo) 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, ASSOCIATION is well equipped to perform those activities; and
WHEREAS, TEX. TAx Cone §351.101(c) authorizes CITY to delegate by contract with
ASSOCIATION, as an independent entity, the management and supervision of programs and
activities of the type described herefaabove 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 ASSOCIATION agree and contract as follows:
L HOTEL TAX REVENUE PAYMENT
Ll Consideration. For and in consideration of the activities to be performed by
ASSOCIATION under this Agreement, CITY agrees to pay to ASSOCIATION a portion of the
hotel tax revenue collected by CITY at the rates and in the manner specified herein (such payments
by CITY to ASSOCIATION sometimes herein referred to as the "agreed payments" or "hotel tax
funds").
1.2 Amount of Payments
(a) As used in this Agreement, the following terms shall have the following specific
meanings:
(i) The term "hotel tax revenue" shall mean the gross 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
Tejas HOT Funding PY2010 - Page I
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 aged 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 31 '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 ASSOCIATION an amount of money in each
contract year equal to the lesser amount of Three and Ninety One Hundredths percent (3.90%)
of the annual base payment amount, or the fixed contract amount of Fifty Three Thousand Nine
Hundred Dollars ($53,900). 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
3.90% of the base payment amount, whichever is less. Each quarterly payment is subject to
receipt of u_n_used funds from the prior contract period and the receipt of the required quarterly
reports.
1.3 Data of Payments to ASSOCIA710N.
(a) The term "quarterly payments" shall mean payments by CITY to ASSOCIATION of
those Wn6iih s 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 report`s and after the
25`h day following -the last day of the contract quarter. If the 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.
Tejas HOT Funding PY2010 - Page 2
1A Other Iimibtians regi+ding eondderatiom
(a) The funding of this project in no way commits CITY to fixture funding of this grogram
beyond the current contract period Any future funding is solely the responsibility of
ASSOCIATION.
(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 firrther allocations if CITY determines that ASSOCIATION's
expenditures deviate materially from their approved budget.
IL USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and in consideration of the payment- by CITY to ASSOCIATION of the
agreed payments of hotel tax funds specified above, ASSOCIATION agrees to use such hotel tax
fiords only for advertising and conducting solicitations and promotional pTogtams to attract tourists
and convention delegates or registrants to the municipality or its vicinitys, as well as 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 art forms as authorized by TEx. TAx CoDE §351.101(a). Funds for any calendar year which
are unused by midnight December 31't of that year shall be refimded to CITY within sixty (60)
days-
2.2 Adntinistrgtive Casts. The hotel tax fiords received from CITY by ASSOCIATION may
be spent for day-to-day operations, office supplies, salaries, travel expenses, and other
administrative costs allowed by TEX. TAX CODE 351.101(fj but only if each such expenditure is
directly attributable to work on programs, which promote tourism and the hotel and convention
industry, and promotes at least one of the six statutory purposes enumerated within TEx. TAX CODE
§351.101(a).
23 Specific Resh icfions on Use of Funds.
(a) That portion of total administrative costs of ASSOCIATION for which hotel tax
funds may be used shall not exceed that portion of ASSOCIATION's administrative costs actually
incurred in conducting the activities specified in 72.1 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 and the performance of the person's job in an efficient and
professional manner.
Tejas HOT Funding PY2010 - Page 3
Ib RECORDKIZEPING AND REPORTING REQ
3.1
(a) ASSOCIATION shall prepare and submit to the City Manager of CITY an annual
budget (see Exhibit "A") as approved by the City Council for each calendar year, for such
operations of ASSOCIATION in which the hotel tax funds shall be used by ASSOCIATION This
budget shall specifically identify proposed expenditures of hotel tax funds by ASSOCIATION. In
other words, CITY should be able to audit specifically the purpose of each individual cqxmdrture of
hotel tax fiords ftom the separate account relating to hotel tax funds CITY shall not pay to
ASSOCIATION 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 Failure to submit an
annual budget may be considered a breach of contrail, and if not remedied is considered grounds for
termination of this Agreement as stated in paragraph 4.2.
(b) ASSOCIATION acknowledges that the approval of such budget by the Denton City
Council creates a fiduciary duty in ASSOCIATION with respect to the hotel tax finds paid by
CITY to ASSOCIATION under this Agreement. ASSOCIATION 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.
3.2 Separate Accounts. ASSOCIATION shall maintain any hotel tax funds paid to
ASSOCIATION 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.
33 Flnmdal Records. ASSOCIATION shall maintain complete and accurate financial
records of each oTen iture of the hotel tax funds made by ASSOCIATION. These funds are
required to be classified.as restricted fiords for audited financial purposes, and may not be used for
contr eW 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 designate, or any other
person, ASSOCIATION shall make such financial records available for inspection and review by
the party malaing the request. ASSOCIATION 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.
3A Quutmly Reports- After initial receipt of the hotel tax funds, and within thirty days after
the end of every contract quarter, ASSOCIATION shall fiunish 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), and (3) a copy of all financial records (e.g.,
copies of front and back 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 designate. ASSOCIATION shall respond promptly to any request from the City
Manager of CITY, or designate, for additional information relating to the activities performed under
this Agreement.
Tejas HOT Funding PY2010 -Page 4
3.5 Notice of Meetmp. ASSOCIATION shall give the City Manager of CITY, or his
designate, reasonable advance written notice of the time and place of all meetmgs of
ASSOCIATION's Board of Directors, as well as any other meeting of any constituency of
ASSOCIATION, at which this Agreement or any matter subject to this Agreement shall be
considered.
IV. TERM AND TERMINATION
4.1 TeraL The team of this Agreement shall commence on January 1, 2010 and terminate at
midnight on January 31, 2011. However, the program period shall commence on January 1, 2010
and terminate at midnight on December 31, 2010. 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 expenditres or unspent fiords shall be forfeited to
CITY upon termination of the Agreement.
4.2 Tarmthwitim Without Csruse.
(a) This Agreement may be terminated by either parry, 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 ASSOCIATION for any contractual obligations of ASSOCIATION
undertaken by ASSOCIATION in satisfactory performance of those activities specified in I2.1
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 ASSOCIATION, or to assume the performance of any contractual
obligations of ASSOCIATION, for or under any contract entered into by ASSOCIATION as
contemplated herein, shall not exceed 66 213% of the current quarterly payment.
(c) Further, upon termination pursuant to 142(a), ASSOCIATION will provide CITY:
1) Within 10 business days from the termination notification, a short-term budget of probable
expenditures for the remaining 60 day period between termination notification and contract
termination. This budget will be presented to Council for approval within 10 busmess-days after
receipt by CITY. If formal approval is not given within 10 business days, 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
30 days, a full accounting of all expenditures not previously audited by CITY; 3) Within 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 all expenditures and tax funds on the day of
termination. ASSOCIATION will be obligated to return any unused fiords, or fiords determined
to be used improperly. Any use of remaining fiords by ASSOCIATION after notification of
termination is conditioned upon such contractual obligations having been incurred and entered
Tejas HOT Funding PY2010 - Page 5
into in the good faith performance of those services contemplated in 2.1 and 2.2 above, and
further conditioned upon such contractual obligations having a term not exceeding the full term
of this Agreement.
43 Automatie Ternihadim This Amement shall automatically terminate upon the
occurrence of any of the following events:
(a) The termination of the legal existence of ASSOCIATION;
(b) The insolvency of ASSOCIATION, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an assignment by ASSOCIATION for the benefit of creditors;
(c) The continuation of a breach of any of the temrs or conditions of this Agreement by
either CITY or ASSOCIATION 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 ASSOCIATION to submit a financial quarterly report which complies
with the reporting procedures regiured herein and generally accepted accounting principles prior to
the beginning of the next contract term, or quarterly as required by Section 13 hereof.
4A Right to Immediate Tennhu ion 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 otherparty in the event that any person has instituted litigation conceming the activities of the
non-terminating party, and the bang party reasonably believes that such activities are required
or prohibited under this Agreement.
4.5 In the event that this Agreement is terminated pursuard t0 IN43 or 4.4, ASSOCIATION
agrees to refimd any and all unused funds, or funds determined by CITY to have been used
improperly, within 30 days after termination of this Agreement.
V. GII ERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall prohibit, nor
be construed to prohibit, the agreement by ASSOCIATION with another private entity, person, or
organization for the performance of those services .described in 12.1 above. In the event that
ASSOCIATION enters into any arrangement, contractual or otherwise, with such other entity,
person or organization, ASSOCIATION 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 repotting requirements, separate fiords maintenance, and
limitations and prohibitions pertaining to cgxaditure of the agreed payments and hotel tax funds.
5.2 Indeitendent Contractor. ASSOCIATION 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. ASSOCIATION shall have exclusive control of its operations and performance of
services hereunder, and such persons, entities, or organizations performing the same, and
Tejas HOT Funding PY20I0 - Page 6
ASSOCIATION shall be solely responsible for the acts and omissions of its directors, officers,
employees, agents, and subcontractors. ASSOCIATION shall not be considered a partner or joint
venturer with CITY, nor shall ASSOCIATION be considered, nor in any manner hold itself out as,
an agent or official representative of CITY.
53 Imlemn an. ASSOCIATION AGREES TO INDEMNIFY, HOLD HARMLLESS,
AND DEFEND QTY, ITS OFFICERS, AGENTS, AND EMPLOYEES FROM AND
AGAINST ANY AND ALL CLAIMS OR SUM'S FOR INJURIES, DAMAGE, LOSS, OR
LIABILITY OF WHATEVER IOND OR CHARAC1174 ARISING OUT OF OR IN
CONNECTION WITH THE PERFORMANCE BY ASSOCIATION OF THOSE
SERVICES CONTEMPLATED BY THIS A , 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 ASSOCIATION, ITS OFFICERS,
EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND E"TIEES.
SA Assignment ASSOCIATION shall not assign this Agent without first obtaining the
written consent of CITY.
%5 Notice. Any notice required to be given under this Agreement or any statZrte, 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
City Manager
City of Denton
215 E. McKinney
Denton, TX 76201
ASSOCIATION
Tejas Storytelling Association, Inc.
Elizabeth Ellis
P.O. Box 2846
Denton, Texas 76202-2806
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 CTI Y and ASSOCIATION and their respective successors and assigns.
5.7 Applicaflon 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 Exdlmve 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, relaxing 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.
Tejas HOT Funding PY2010 - Page 7
3.9 DQplieabe OrWmalL This Agreement is executed in duplicate originals.
5.10 Madbtg~. The headings and subheadings of the various sections and paragraphs- of this
Agreement are inserted merely for the purpose of convenience and do not a4muss or imply any
limitation, definition, or extension of the specific terms of the section and paragraph so designated.
5.11 Severabft If any section, subsection, paragraph, sentence, clause, phrase or word in this
Ate, or aeon thereof to any person or circumstance is held invalid by any court of
competent Jurisdiction, such holding shall not affect the validity of the ruining portions of this
Agreement, and the parties hereby declare they would have enacted such remaining portions despite
any such invalidity.
512 Insurmec. ASSOCIATION shall provide insurance as follows:
$500,000 Commercial General Liability, or $1,000,000 Event Insurance, covering
all evens taking place on City-owned property,
2. Statutory Workers' Compensation and Employers' Liability
($100,000!$500,000/$100,000), and
3. $250,000 Liquor/Dran1 Strop Inability for any event occuning 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 bmitted prior to any payment by CITY.
EXECUTED thise3 - day of 2009.
THE CITY OF DENTON, TEXAS
r
By:
GEORGE C. CAMPBELL,
CITY MANAGER
ATTEST: APPROVED AS
By., o V 4--, By:
3 IWER ALTIāRS, ANTI SS,
C Y SEC IRJ!rARY ATTORNEY
Tejas HOT Funding PY2010 - Page 8
TEJAS STORYTELLING ASSOCIATION,
INC.
ATTEST:
By:
Spy
By;
r
APPROVED AS TO LEGAL FORM:
By:
Tejas HOT Funding PY2010 - Page 9
Exhibit A
Tejas Storytelling Association
The 25th Annual Tejas Storytelling Festival
Program Year 2010 Budget
Advertising
Newspapers
$ 7,000
Magazines
3,000
Marketing
8,400
Printing
5,000
Promotion
1,000
Direct Mail
2,000
Signs
2,000
Radio
12,000
Photography
500
Internet
3,000
$ 43,900
Art
Performers $ 6,500
Site Operations 3,500
$ 10,000
Total Request $ 53,900