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2001-326 O INANCE No AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN INTERLOCAL AGREEMENT BETWEEN THE CITY OF DENTON AND DENTON COUNTY FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE IN SUPPORT OF THE BAYLESS- SELBY HOUSE MUSEUM, AND PROVIDING AN EFFECTIVE DATE WHEREAS, Tex Tax Code §351 101(a) authorizes the City of Denton, Texas to use revenue from its mummpal hotel occupancy tax to promote tourism and the convention and hotel industry by advertising and conducting sohcatations and promotional programs to attract tourists and convention delegates or registrants to the mumc~palaty or its VlClmty, as well as to engage m historical restoration and preservatxon projects and acUvaUes and advemsang and conducting sohcatataons and promoUonal programs to encourage tourists and convention delegates to wsat preserved historic sates and museums, and WHEREAS, the County of Denton, Texas ,s well equipped to perform those actlwt~es by ars operation of the Bayless-Selby House Museum, and WHEREAS, Tex Tax Code §351 101(c) authorizes the C~ty of Denton, Texas to delegate by contract with the County of Denton, Texas, as a governmental enUty, the management and supervision of programs and activities of the type described heremabove funded w~th revenue from the mummpal hotel occupancy tax, and WHEREAS, both the C~ty of Denton, Texas and the County of Denton, Texas have a secondary source of authority to enter into an lnterlocal cooperat, on agreement, pursuant to Chapter 791 of the Texas Government Code, as the agreement ~s authorized by both governmental bodies, the agreement states the purpose, terms, rights, and duties of the contracting parties, the consideration as bemg prod by City of Denton, Texas out of current revenues, the compensation as fmr, and the senates to be performed are 'Ynuseum services" authorized under §791 003(3)(F) of the Texas Government Code, which each party ~s authorized to perform ~nd~vldually, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the Mayor m hereby authorized to execute an agreement between the City of Denton and Denton County for the payment and use of hotel tax revenue m support of the Bayless-Selby House Museum, under the terms and conditions contained in the agreement, a copy of whxch IS attached hereto and made a part hereof SECTION II That this ordinance shall become effective lmmedmtely upon Its passage and approval EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY PAGE 2 AGREEMENT BETWEEN THE CITY OF DENTON AND DENTON COUNTY, TEXAS (BAYLESS-SELBY HOUSE MUSEUM) (CY2002) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEMENT made between the City of Denton, Texas, a mumclpal corporation (the "CITY"), and County of Denton, Texas, a governmental entity existing under the laws of the State of Texas, contracting on behalf of its Bayless-Selby House Museum (eolleetavely, the "MUSEUM") WHEREAS, T~x T^x CoDe §351 002 authorizes the CITY to levy by orchnance a munmlpal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the consideration prod by a hotel occupant, and WHEREAS, by ordananee, the CITY has provided for the assessment and collection of a mummpal hotel occupancy tax an the Cxty of Denton of seven percent (7%), and WHEREAS, T~x T^x CODe §351 101(a) authorizes the CITY to use revenue fi.om its mummpal hotel occupancy tax to promote tourism and the convention and hotel industry by advertising and conducting sohc~taUons and promotional programs to attract tourists and convention delegates or registrants to the mummpahty or its wcmlty, as well as to engage in bastorlcal restoraUon and preservatton projects and activities and advertising and conducting sohcltaUons and promotional programs to encourage totmsts and convention delegates to visit preserved lustonc s~tes and museums, and WHEREAS, the MUSEUM is well eqmpped to perform those acuvlt~es, and WHEREAS, Tex TAX CODe §351 101(c) authorizes the CITY to delegate by contract with the MUSEUM, as a governmental entaty, the management and supervision of programs and activities ,of the type described heremabove funded w~th revenue fi.om the mumclpal hotel occupancy tax, and WHEREAS, both CITY and MUSEUM have a secondary source of authority to enter into this Agreement as an mterlocal cooperation agreement, pursuant to Chapter 791 of the Texas Government Code, as the Agreement is authorized by both governmental bo(hes, the Agreement states the purpose, terms, rights, and duties of the contracting parUes, the conslderaUon is being prod by CITY out of current revenues, the compensation is fair, and the services to be performed are "museum, services" anthonzed under §791 003(3)(F) of the Texas Government Code, wbach each party ~s authorized to perform individually, NOW, THEREFORE, in conslderatton of the performance of the mutual covenants and promises contained herein, the CITY and the MUSEUM agree and contract as follows I. HOTEL TAX REVENUE PAYMENT 1 1 Consideration. For and m cons~deraUon of the activities to be performed by the MUSEUM under this Agreement, the CITY agrees to pay to the MUSEUM a pomon of the hotel tax revenue collected by the CITY at the rates and m the manner specified here~n (such payments by the CITY to the MUSEUM somettmes herein referred to as the "agreed payments" or "hotel tax funds") 1 2 Amount of Payments. (a) As used m flus Agreement, the following terms shall have the following spemfic meanings (0 The term "hotel tax revenue" shall mean the gross momes collected and received by the City as mumclpal hotel occupancy tax at the rate of seven percent (7%) of the price poad for a mom m a hotel, pursuant to Texas Tax Code 351 002 and C~ty Ordinance Hotel tax revenue will ~nclude penalty and interest related to the late payments of the tax revenue by the taxpayer 00 The term "Collection period" will mean the collection period for the CITY's fisgal year It vail include hotel tax revenue due to the City for the relevant fiscal year and collected through the 22nd day of the month follovang the close of the relevant fiscal year (n0 The term "base payment amount" shall mean a net mount of money equal to the total hotel tax revenue collected by the CITY during any relevant period of time (t e, fiscal year or fiscal quarter), less (1) attorney and auditing costs recurred dunng such relevant period of tmae for costs of collectton or audttlng of hotel taxpayers Attorney and auchtmg costs malude fees prod to attorneys or agents not m the regular employ of the CITY for wluch attorneys or agents effect comphance or collection of the hotel tax from taxpayers, and (2) court costs and other expenses incurred m htagat~on against or audlUng of such taxpayers 0v) The term "contract quarter' shall refer to any quarter of the calendar year ~n wluch ttus Agreement ~s in force Contract quarters vall end on March 31st, June 30th, September 30~, and December 31st of each contract year Co) In return for satisfactory performance of the activities set forth m this Agreement and all attachments hereto, the CITY shall pay to MUSEUM an amount of money ~n each contract year equal to the lesser amount of Two and Sixty Two One Hundredths percent (2 62%) of the annual base payment amount or the fixed contract amount of Twenty-F~ve Thousand Three Hundred Twenty-F~ve Dollars ($25,325) This amount will be divided into quarterly payments equal to 25% of the annual fixed contract amount, unless the CITY can show w~th reasonable certainty that the annual base payment amount will be less than originally est~mate~ for the fiscal year The fourth quarterly payment will represent 25% of the fixed contract amount or the unp0ad remainder of 2 62% of the base payment amount, whachever as less Each quarterly payment xs 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 the CITY to the MUSEUM of those amounts specffied m ¶1 2, above, as determined by the hotel tax revenue collected (b) Each quarterly payment shall be prod upon receipt of the reqmred reports and after the 25th day following the last day of the contract quarter If quarterly financial and performance reports are not received wttban tinrty (30) days of the end of the apphcable contract quarter, the remplent may be held m breach of tlms Agreement The CITY may w~thhold the quarterly payment(s) until the appropriate reports are recexved and approved, winch approval shall not unreasonably be w~thheld 1.4 Other limitations regarding consideration (a) The funding of this project ~n no way commas the CITY to future funding of th~s program beyond the current contract period Any future funding is solely the respons~bthty of the MUSEUM (b) It ~s expressly understood that rials contract m no way obligates the General Fund or any other momes or credits of the CITY (c) CITY may w~thhold further allocations ~f CITY deterrmnes that MUSEUM's expenditures deviate materially from their approved budget II USE OF HOTEL TAX REVENUE 2 1 Use of Funds. For and ~n cons~deratlon of the payment by the CITY to the MUSEUM of the agreed payments of hotel tax funds specffied above, the MUSEUM agrees to use such hotel tax funds only for advertising and conducting sohc~tattons and promotional programs to attract tourists and conventmn delegates or regtstrants to the mummpahty or ~ts vmm~ty, as well as to engage ~n Instoncal restoratmn and prescrvatmn projects and activities and advertising and conducting sohc~tat~ons and promotional programs to encourage tourists and conventmn delegates to ws~t preserved ,lustonc s~tes and museums, as authorized by TEx TAX CODE §351 101(a)(3) and (a)(5) Funds for any calendar year winch are unused by m~dmght December 31st of that year shall be refunded to CITY w~thtn tinrty (30) days 2.2 Allowable Administrative Costs. The hotel tax funds received from the CITY by the MUSEUM may be spent for day-to-day operatmns, office supplies, salaries, and other adm~mstrattve costs allowed by TEx T^x CooE §351 10 l(f), only ff they are d~rectly almbutable to work on programs winch promote tourism and the hotel and cunvent~on ~ndustry, and winch also promote at least one of the five statutory purposes enumerated w~tlun T~x TAX CODE §351 101(a) 2 3 Specific Restrictions on Use of Funds. (a) MUSEUM agrees to demonstrate strict comphance w~th the recordkcepmg and apportionment lumtatmns ~mposed by T~x TAX CODE §351 101(f) and §351 108 (c) and (d) MUSEUM shall not utthze hotel tax funds for any expenditure winch has not been specffically documented to satisfy the purposes set forth m ¶¶2 1 and 2 2 above (b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct an act~wty the primary purpose of winch ~s not d~rectly related to the promotton of local tourism and the conventson and hotel mdustry or the performance of the person's job m an efficient and professmnal manner III. RECORDKEEPING AND REPORTING REQUIREMENTS 3 1 Budget. (a) The MUSEUM shall prepare and submit to the C~ty Manager of the CITY an annual budget (see Extublt "A") as approved by the C~ty Council for each calendar year, for such operations of the MUSEUM ~n wlunh the hotel tax funds shall be used by the MUSEUM Thts budget shall specffically ~denttfy proposed expenthtures of hotel tax funds by the MUSEUM In other words, the CITY should be able to aucht specifically where the funds m the separate checking account relating to hotel tax funds will be expended The CITY shall not pay to the MUSEUM any hotel tax revenues as set forth m Section I oftlus contract dunng any fiscal year of tlus Agreement unless a budget for such respective fiscal year has been approved in writing by the Denton C~ty Council authorizing the expenditure of funds Fmlure to submit an annual budget may be considered a breach of contract, and ff not remedied ~s constdered grounds for termination of fins Agreement as stated m paragraph 4 2 (b) The MUSEUM acknowledges that the approval of such budget by the Denton City Counml creates a fiducmry duty ~n the MUSEUM w~th respect to the hotel tax funds prod by the CITY to the MUSEUM under flus Agreement The MUSEUM shall expend hotel tax funds only ~n the manner and for the purposes specffied m th~s Agreement, Tex TAX CODE §351 101(a) and m the budget as approved by the CITY 3.2 Separate Accounts. The MUSEUM shall mmntmn any hotel tax funds paid to the MUSEUM by the CITY m a separate bank checking account with segregated accounting, such that any reasonable person can rewew the source of expenditures of tax funds A bank reconcthat~on report (see Exinb~t "B") ~s requtred w~th each quarterly report 3.3 FlnanelalReeords. The MUSELrM shall mmntmn complete and accurate financial records of each expendature of the hotel tax funds made by the MUSEUM These funds are reqmred to be elassffied as restricted funds for audited financial purposes, and may not be used for suppo~ng sermces, mcludsng, but not lun~ted to, auaht~ng fees and attorney's fees Upon reasonably advance written request of the Denton C~ty Council, the C~ty Manager or designate, or any other person, shall make such financial records available for ~nspectlon and rewew by the party makmg the request MUSEUM understands and accepts that all such financial records, and any other records relating to this Agreement shall be subject to the Pubhc Information Act, Tex Gov'? CovE, ch, 552, as hereafter amended 3 4 Quarterly Reports. W~thm tinrty days after the end of every contract quarter, MUSEUM shall furmsh to CITY (1) a performance report of the work performed under th~s Agreement descnbmg the actavlt~es performed pursuant to this Agreement dunng that contract quarter, (2) a hst of the expenthtures made w~th regard to hotel tax funds pursuant to Tex TAX Cooe §351 101(c), (3) a copy of all financial records (eg, receipts, ~nvmces, bank statements, and other relevant documentataon), and (4) and a quarterly salary audit complying with Tex TAX COVE §351 108(c) and CITY's pubhshed gmdelmes, detaalmg the tnne spent by each employee(s) ~n promotion of tounsm through any of the five statutory purposes authonzed under TEX TAX COD~ §351 101(a) MUSEUM shall prepare and deliver all reports in a form and manner approved by the City Manager or designate (see Exlub~t "B") The MUSEUM shall respond promptly to any request from the City Manager of the CITY, or designate, for addmonal reformation relating to the activities performed under flus Agreement 3.5 Notice of Meetings. The MUSEUM shall give the City Manager of the CITY reasonable advance written notice of the tune and place of all meetings of MUSEUM's Board of Directors, as well as any other meeting of any eonmtuency of the MUSEUM at which this Agreement or any matter the subject of flus Agreement shall be considered This provision shall not be deemed to require the MUSEUM to give notate of any executive session of the Executive Comnuttee of the MUSEUM IV TERM AND TERMINATION 4 1 Term. The term of flus Agreement shall commence on January l, 2002 and terminate at mldrnght on December 31, 2002 This term shall be a period of one year 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), the CITY agrees to reimburse the MUSEUM for any contractual obligations of the MUSEUM undertaken by the MUSEUM in satisfactory performance of those actlvmes 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 flus Agreement Notwithstanding any provision hereof to the contrary, thc obligation of the CITY to reimburse the MUSEUM or to assume the performance of any contractual obllgntmns of the MUSEUM for or under any contract entered into by the MUSEUM as contemplated hereto shall not exceed 66 2/3% of the current quarterly payment (c) Further, upon termlnatmn pursuant to ¶4 2(a), the MUSEUM will provide the CITY 1) Within 10 business days from the termination notification, a short-term budget of probable expenditures for the remaimng 60 day permd between termination notification and contract termination This budget will be presented to Council for approval within 10 buslnass days after receipt by CITY If formal approval is not given within 10 business days and thc 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) Wltlun 30 days, a full accounting of all expenditures not previously audited by the City, 3) Within $ business days of a request from the CITY, a listing of expenditures that have occurred since the last required reporting penod, 4) a final accounting of all expenditures and tax funds on the day of termination The MUSEUM will be obligated to return any unused funds or funds determined to be used improperly Any use of remaining funds by the MUSEUM after notfficat~on of termination ~s contht~oned upon such contractual obhgat~ons having been ~ncurred and entered mto m the good faith performance of those servmes contemplated in 2 1 and 2 2 above, and further conchtloned upon such contractual obhgatlons hawng a term not exceeding the full term of tins Agreement 4 3 Antomatle Termination. Tins Agreement shall automatically terminate upon the occurrence of any of the followang events (a) The tenmnat~on of the legal emstence of the MUSEUM, (b) The ~nsolvency of the MUSEUM, the fihng of a petition m bankruptcy, either voluntarily or involuntarily, or an ass~glunent by the MUSEUM for the benefit of crechtors, (c) The eontmuataon of a breach of any of the terms or conditions of tins Agreement by e~ther the CITY or the MUSEUM for more than tturty (30) days after written not,ce of such breach m given to the breaching party by the other party, or (d) The fatlure of the MUSEUM to subnut a financml quarterly report winch complies w~th the reporting procedures requrred herean and generally accepted accounting pnnmples prior to the begmmng of the next contract term, or quarterly as required by Section 1 3 hereof 4 4 Right to Immediate Termination Upon L~t~gation Notwtthstandmg any other prows~on of tYas Agreement, to unt~gate damages and to preserve ewdence and ~ssues for judmml determmataon, e~ther party shall have the right to terminate tins Agreement upon ~mmedmte not~ce to the other party m the event that any person has instituted ht~gat~on concermng the activities of the non-terminating party, and the terminating party reasonably beheves that such acttwt~es are reqmred or proininted under tins Agreement 4 5 In the event that tins Agreement is terminated pursuant to ¶¶4 3 or 4 4, MUSEUM agrees to refund any and all unused funds, or funds determined by the CITY to have been used ~mproperly, w~tfun 30 days after tenmnat~on of tins Agreement V. GENERAL PROVISIONS 5.1 Subcontract for Performance of Services Notinng m tins Agreement shall proinb~t, nor be construed to pmluint, the agreement by the MUSEUM w~th another private entity, person, or orgamzatlon for the performance of those services described in ¶2 1 above In the event that the MUSEUM enters into any arrangement, contractual or otherwise, w~th such other entaty, person or orgamzatlon, the MUSEUM shall cause such other entity, person, or orgamzatlon to adhere to, conform to, and be subJeCt to all provisions, terms, and conditions of tins Agreement and to TEx TAX CODE ch 351, including reporting reqmrements, separate funds maintenance, and hm~tat~ons and proinblt~ons pertaunng to expenditure of the agreed payments and hotel tax funds 5 2 Independent Contractor. The MUSEUM shall operate as an ~ndependent contractor as to all serrates to be performed under tins Agreement and not as an officer, agent, servant, or employee of the CITY The MUSEUM shall have exclusive control of ~ts operations and performance of servmes hereunder, and such persons, ent~t~es, or orgamzatlons performing the same and the MUSEUM shall be solely responsible for the acts and omissions of its (hrectors, officers, employees~ agents, and subcontractors The MUSEUM shall not be considered a partner or joint venturer w~th the CITY, nor shall the MUSEUM be considered nor in any manner hold atself out as an agent or official representative of the CITY $.3 Indenmifleat~on. TO THE EXTENT AUTHORIZED BY LAW, THE MUSEUM AGREES TO INDEMNIFY, HOLD HARMLESS, AND DEFEND THE CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS IOR SUITS FOR INJURIES, DAMAGE, LOSS, OR LIABILITY OF WHATEVER KIND OR CHARACTER, ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE BY THE MUSEUM OR 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 MUSEUM, ITS OFFICERS, EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES. 5.4 Assignment The MUSEUM shall not assign tins Agreement w~thout first obtaining the wntten consent of the CITY $.$ Notice. Any notice reqmred to be given under tins Agreement or any statute, ordinance, or regulation, shall be effective when given ~n writing and deposited m the Umted States marl, cemfied marl, return receipt requested, or by hand-dehvery, addressed to the respective part,es as follows CITY MUSEUM C~ty Manager Bayless -Selby House Museum City of Denton Georgia Caraway, D~reetor 215 E McKmney ll0W H~ckory St Denton, TX 76201 Denton, Texas 76201 $.6 Inurement Tins Agreement and each prowslon hereof, and each and every right, duty, obbgat~on, and hab~hty set forth hereto shall be binding upon and ~nure to the benefit and obhgat~on of the CITY and the MUSEUM and their respective successors and assigns 5 7 Application of Laws All terms, conditions, and provisions of this Agreement are subject to all apphcable federal laws, state laws, the Charter of the C~ty of Denton, all ordinances passed pursuant thereto, and all judicial detenmnat~ons relaUve thereto 5.8 Exclusive Agreement. Tins Agreement conttuns the entire understanding and constitutes the entare agreement between the parties hereto concerning the subject matter contained here~n There are no representatmns, agreements, arrangements, or understandings, oral or wntten, express or lmphed, between or among the parttes hereto, relating to the subject matter of tbas Agreement, winch are not fully expressed here~n The terms and con(ht~ons of tins Agreement shall prevaal notwithstanding any vanance in tins Agreement from the terms and conditions of any other document relating to tins transaction or these transactions 5.9 Duplicate Originals Thru Agreement as executed in duphcate originals 5 10 Headings. The headings and subheadings of the various sections and paragraphs of ttus Agreement are inserted merely for the purpose of convemence and do not express or imply any hmltatmn, defimtmn, or extenmon of the spemfic terms of the sectmn and paragraph so demgnated 5 11 Severabihty. If any section, subsection, paragraph, sentence, clause, phrase or word ~n tins Agreement, or application thereof to any person or c~rcumstance ~s held ~nval~d by any court of competent junschct~on, such holding shall not affect the vah&ty of the remmnmg pomons of thru Agreement, and the part,es hereby declare they would have enacted such remalmng portmns despite any such ~nvahdlty 5 12 Insurance. The MUSEUM shall prowde ansurance as follows 1 Statutory Workers' Compensation and Employers' LlaNhty ($100,000/$500,000/$100,000) Proof of coverage shall be submitted prior to any payment by the CITY E CUTEDt s 4¢dayof ,2001 THE CITY OF DENTON, TEXAS EULINE BROCK, MAYOR ATTEST APPROV .ED.__~A~OI~M CIYY SECRETARY ?~_.._...-~--~ CITY ATTORNEY ,,,,' % :"47¢'% ~.,(3B B r ~ "<':b. ~.,0A'~?'"" DENTON COUNTY,,, ,/S,___,4~T S : 9, ? V -lll~.~.~ COUNTY JUDGE P.l_/~l // ATTEST % ~//X3k ..~,:.~,e APPROVED AS TO LEGAL FORM , k~h~'p~til~k~O~ D ollttm~l~Ccm--~YlkHOT~lyll~ .~'by~ /~'{SDISTRICT ATTORNEY EXHIBIT A Bayless-Selby House Museum Program Year 2002 ADVERTISING Brochures, Newspapers, Magazines, B~llboards $ 3,325 00 Pnnted Materials $ 2,500 00 $ 5,825 00 HISTORICAL Archival Supplies $ 500 00 $ 500 00 ADMINSTRATION House Manager - Parbal Salary $19,000 00 $19,000 00 $ 25,325 00 SAMPLE FINANCIAL REPORT Exhibit B Program Year 2002 1 ST 2ND 3RD 4TH YEAR QUARTER QUARTER QUARTER QUARTER to (JAN. MAR) (APR - JUN) (JUL - SEP) (OCT * DEC) DATE $o oo $o oo $o oo $o oo $0 00 $0 oo $o oo $o o0 $o oo $0 oo $o oo $o oo $o oo $o oo $0 00 $o oo $o oo $o oo $o oo $o o0 $0 oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o 00 $0 oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $0 00 $0 oo $o 00 $o oo $o 00 $o oo $0 oo $o o0 $o oo $o oo $0 O0 $0 O0 $0 O0 $0 O0 $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo Date Submitted Program Director