2007-223s:bur documents\ordinances\07\hot\historical park foundation.doc
ORDINANCE NO. ~00~ ~~~
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND THE HISTORICAL PARK
FOUNDATION OF DENTON COUNTY, 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 Historical Park Foundation, Inc. for the payment
and use of hotel tax revenue, render 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 ~5- day of ~~J.(~~(~ , 2007.
.,~~
PERR . McNEILL, M YOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: ~
APPROVED AS TO LEGAL FORM:
AGREEMENT BETWEEN THE CITY OF DENTON AND
HISTORICAL PARK FOUNDATION OF DENTON COUNTY, INC. (PY2008)
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 Historical Park Foundation, Inc., a legal entity incorporated under the laws of
the State of Texas (the "FOUNDATION"):
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; as well as to engage in historical
restoration and preservation projects and activities and
WHEREAS, FOUNDATION is well equipped to perform those activities; and
WHEREAS, TEx. Tnx CODE §351.101(c) authorizes CI'T'Y to delegate by contract with
FOUNDATION, 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 FOUNDATION agree and contract as follows:
I. HOTEL TAX REVENUE PAYMENT
1.1 Consideration. For and in consideration of the activities to be performed by
FOUNDATION under this Agreement, CITY ;agrees to pay to FOUNDATION a portion of the
hotel tax revenue collected by CITY at the rates and in the manner specified herein (such payments
by CITY to FOUNDATION sometimes herein referred to as the "agreed payments" or "hotel tax
funds").
1.2 Amount of Payments.
(a) As used in this Ageement, 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
Ordinance. Hotel tax revenue will include penalty and interest related to the late
payments of the tax revenue by the taxpayer.
(u) The term "Collection period" will mean the collection period for C1TY's
fiscal year. It will include hotel tax revenue due to CTTY for the relevant fiscal year and
collected through the 22nd day of the month following the close of the relevant fiscal yeaz.
(iii) The term "base payment amount" shall mean a net amount of money equal
to the total hotel tax revenue collected by CTI'Y during any relevant period of time (i.e.,
fiscal yeaz 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 regulaz 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 yeaz in
which this A~reement is in force. Contract quarters will end on March 315, June 30a',
September 30 ,and December 31s` of each contract yeaz.
(b) In return for satisfactory performance of the activities set forth in this Agreement
and all attachments hereto, CITY shall pay to FOi.TNDATION an amount of money in each
contract yeaz equal to the lesser amount of Sixty Four Hundredths percent (.64%) of the annual
base payment amount or the fixed contract amount of Nine Thousand Dollazs ($9,000). 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 yeaz. The fourth quarterly payment will
represent 25% of the fixed contract amount or the unpaid remainder of .64% of the base payment
amount, whichever is less. Each quarterly payment is subject to receipt of unused funds from the
prior contract period and the receipt of the required quarterly reports.
1.3 Dates of Payments.
(a) The term "quarterly payments" shall mean payments by CITY to FOUNDATION of
those amounts specified in ¶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
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 unreasonably be 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 of
FOUNDATION.
Historical Pazk Foundation PY2008 HOT Funding -Page 2
(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 FOUNDATION'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 MUSEUMS of the
agreed payments of hotel tax funds specified above, MUSEUMS agree to use such hotel tax fluids
only for advertising and conducting solicitations and promotional programs to attract tourists azid
convention delegates or,registrants to the municipality or its vicinity, as well as to engage in
historical restoration and preservation projects and activities to encourage tourists and convention
delegates to visit preserved historic sites and museums, as authorized by TEx. TAx CODE
§351.101(a)(3) and (a)(5). Funds for any caleridaz year which aze unused by midnight December
31 s` of that year shall be refunded to CITY within sixty (60) days.
2.2 Administrative Costs. The hotel tax funds received from CITY by FOUNDATION may
be spent for day-to-day operations, office supplies, salaries, travel expenses, and other
administrative costs allowed by TEX. TAX CODE 351.101(f), only if they aze directly attributable
to work on programs which promote tourism and the hotel and convention industry, and which also.
promote at least one of the six statutory purposes enumerated within TEX. TAX CODE 351.101(a).
2.3 Specific Restrictions on Use of Funds.
(a) That portion of total administrative costs of FOUNDATION for which hotel tax
funds maybe used shall not exceed that portion of FOUNDATION's administrafive costs actually
incurred in conducting the activities specified in,¶2.1 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 or the performance of the person's job in an efficient and
professional manner.
III. RECORDKEEPING AND REPORTING REQUIltEMENTS
3.1 Budget.
(a) FOUNDATION shall prepare and submit to the City Manager of CITY an annual
budget (see Exhibit "A'~ as approved by the City Council for each calendaz year, for such
operations of FOUNDATION in which the hotel tax funds shall be used by FOUNDATION. This
budget shall specifically identify proposed expenditures of hotel tax funds by FOUNDATION. hi
other words, CITY should be able to audit specifically where the funds in the separate account
relating to hotel tax funds will be expended. CITY shall not pay to the FOUNDATION any hotel
tax revenues as set forth in Section I of this contract during any fiscal year of this Agreement unless
a budget for such respective fiscal 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
Historical Pazk Foundation PY2008 HOT Funding -Page 3
breach of contract, and if not remedied is considered grounds for termination of this Agreement as
stated in paragraph 4.2.
(b) FOUNDATION acknowledges that the approval of such budget by the Denton City
Council creates a fiduciary duty in FOUNDATION with respect to the hotel tax funds paid by
CITY to FOUNDATION under this Agreement. FOUNDATION 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. FOUNDATION" shall maintain any hotel tax funds paid to
FOUNDATION by CITY in a sepazate account or with segregated fund accounting, such that any
reasonable person can ascertain the revenue source of any given expenditure.
3.3 Financial Records. FOUNDATION `shall maintain complete and accurate financial
records- of each expenditure of the hotel tax funds made by FOUNDATION. 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 and attorney's fees. Uponaeasonable
advance written request of the Denton City Council, the City Manager or designate, or any other
person, shall make such financial records available for inspection and review by the party making
the request. FOUNDATION 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 days after the
end of every quarter thereafter, until all funds have been expended and reported to CITY,
FOUNDATION shall furnish to CITY: (1).'a completed financial report, (2) a list of the
expenditures or copies of the invoices or receipts made with regazd 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 documentafion). Both the financial and
expenditure reports will be in a form either detemuned or approved by the City Manager or
designate. FOUNDATION 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.
3.5 Notice of Meetings. FOUNDATION ,shall give the City Manager or its designate of
CH'Y reasonable advance written notice of the time and place of all meetings of FOUNDATION'S
Board of Directors, as well as any other meeting of any constituency of FOUNDATION 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, 2008 and terminate at
midnight on January 31, 2009._ However, the program period shall commence on January 1, 2008
and terminate at midnight on December 31, 2008. Only those expenditures authorized by Chapter
351 of the Texas Tax Code and the program guidelines, which aze actually incurred, during the
program period, for events and actvities taking place within the program period, aze eligible for
funding under this agreement, and any ineligible expenditures or unspent funds shall be forfeited to
CITY upon temunationof the Agreement.
Historical Pazk Foundation'PY2008 HOT Funding -Page 4
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 FOUNDATION for any contractual obligations of FOUNDATION
undertaken by FOUNDATION in satisfactory performance of those activities specified in ¶¶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 ¶¶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 FOUNDATION or to assume the performance of any contractual obligations
of the FOUNDATION for or under any' contract entered into by FOUNDATION as
contemplated herein shall not exceed 66 2/3% of the cun•ent quarterly payment.
(c) Further, upon termination pursuant to ¶4.2(a), FOUNDATION will provide CITY:
1) Within 10 business days from the termination notification, ashort-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 business days after
receipt by CTfY. If formal approval is not given within 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
30 days, a full accounting of all expenditures not previously audited by CITY; 3) Within 5
business days of a request from CTI'Y, 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. FOUNDATION will be obligated to return any unused funds or"funds determined to
be used improperly. Any use of remaining funds by FOUNDATION 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 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 temminate upon the
occurrence of any of the following events:
(a) The termination of the legal existence of FOUNDATION;
(b) The insolvency of FOUNDATION, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an assignment by FOUNDATION for the benefit of creditors;
(c) The continuation of a breach of any of the terms or conditions of this Agreement by
either CTfY or FOUNDATION for more than thirty (30) days after written notice of such breach is
given to the breaching party by the other party; or
Historical Pazk Foundation PY2008 HOT Funding -Page 5
(d) The failure of FOUNDATION 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 Yo 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 temmnating party reasonably believes that such activities aze required
or prohibited under this Agreement.
4.5 In the event that this Agreement is terminated pursuant to ¶¶4.3 or 4.4, FOUNDATION
agrees to refund any and .all unused funds, .or funds determined by CITY to have been used
improperly, within 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 prohibit, the agreement by FOUNDATION with another private entity, person, or
organization for the performance of those services described in ¶2.1 above. In the event that
FOUNDATION enters into any arrangement, contractual or otherwise, with such other entity,
person or organization, FOUNDATION 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, sepazate funds maintenance, and
limitations and prohibitions pertaining to expenditure of the agreed payments and hotel tax funds.
5.2 Independent Contractor. FOUNDATION 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. FOUNDATION shall have exclusive control of its operations and performance of
services hereunder, and such persons, entities, or organizations perfomung the same and
FOUNDATION shall be solely responsible for the acts and omissions of its directors, officers,
employees, agents, and subcontractors. FOUNDATION shall not be considered a partner or joint
venturer with CITY, nor shall FOUNDATION be considered nor in any manner hold itself out as an
agent or official representative of CITY.
Additionally, no employee, volunteer or contractor of the FOUNDATION shall be considered or
deemed to be an employee of the CITY. The FOUNDATION expressly understands,
acknowledges and agrees that employees, volunteers or contractors of the FOUNDATION aze not
entitled to any benefits from the CfTY including but not limited to health or life insurance, workers'
compensation benefits, or unemployment benefits, any claim to such benefit or compensation being
expressly waived.
5.3 Indemnification. .THE FOUNDATION AGREES TO INDEMNIFY, HOLD
AARMT ES$, AND DEFEND CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES
FROM AND AGAINST ANY AND ALL CLAIMS OR SUTTS FOR INJURIES, DAMAGE,
LOSS, OR LIABILITY OF WHATEVER HIND OR CHARACTER, ARISING OUT OF OR
IN CONNECTION WITH THE PERFORMANCE BY THE FOUNDATION. OR THOSE
Historical Pazk FoundationPY2008 HOT Funding -Page 6
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 FOUNDATION, ITS OFFICERS,
EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES. -
5.4 Assignment. FOUNDATION shall not assign this Agreement without first obtaining the
written consent of CTTY.
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 byhand-delivery, addressed to the respective parties as follows:
CITY FOUNDATION
Historical Park Foundation of Denton
City Manager County, Inc
City of Denton Rynell S Novak
215 E. McKinney 624 W University Dr #241
Denton, TX 76201 ! Denton, Texas 76201
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 FOUNDATION 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 determinafions 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 .arid condifions 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 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 specifiQ terms of the section and paragraph so designated.
5.11 Severability. If any section, subsection, pazagraph, 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 portiotis of this
Historical Park Foundation PY2008 HOT Funding -Page 7
Agreement, and the parties hereby declare they would have enacted such remaitung portions despite
any such invalidity.
5.12 Insurance. FOUNDATION shall provide insurance as follows:
1. $500,000 Commercial General Liability; or $1,000,000 Event Insurance, covering
all events taking place on City-owned property
2. Statutory Workers' Compensation and Employers' Liability
($100,000/$500,000/$100,000) OR an Occupational Accident Insurance program if
approved by the City's Risk Manager
3. $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 addifional insured on all policies (except Workers' Compensation) and
proof of coverage shall be submitted prior to any payment by CITY.
EXECUTED this day of~ ~~~i~L'~ , 2007.
ATTEST:
By: h
JE IFER ALTERS,
CI SEC ARY
ATTEST:
By:
Secretary
THE CITY OF DENTON,
By: ~"7
GEORGE C. CAMPBELL, CITY MANAGER
EDWIN M.
CITY ATTI
Historical Parlf Foundation of Denton County,
Inc.
By: ~ ~ ~' ~'cm/x~~
Chairm hector
APPROVED AS TO LEGAL FORM:
By:
Historical Park Foundation PY2008 HOT Funding -Page 8
Exhibit A
Historical Park Foundation of Denton County, Inc.
Denton County African American Museum
Historical
Exhibit Development
9,000
including displays and interactive map
Total $ 9,000