2001-328 ORDINANCE NO 00/- gA
'AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON BLACK CHAMBER OF
COMMERCE FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND
PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the Mayor is hereby authorized to execute an agreement between the
City of Denton and the Denton Black Chamber of Commerce 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 II That this ordinance shall become effective immediately upon its passage
and approval
PAS SEDANDAPPROFEDthlsthe 4~ day of ~/~2~../ ,2001
EULINE BROCK, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON BLACK CHAMBER OF COMMERCE (CY2002)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the C~ty of Denton, Texas, a mtmlclpal corpuratmn
(the "CITY"), and the Denton Black Chamber of Commerce, a legal entity ex~stmg under the laws
of the State of Texas (the "CHAMBER")
WHEREAS, TEx TAX COD£ §351 002 authorizes the CITY to levy by ordinance a
municipal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the cons~deratmn
prod by a hotel occupant, and
WHEREAS, by ordinance, the CITY has provided for the assessment and collect~un of a
mumc~pal hotel occupancy tax ~n the C~ty of Denton of seven percent (7%), and
WHEREAS, TI~x TAX Coo~ §351 101(a) authorizes the CITY to use revenue fi.om its
mumc~pal hotel occupancy tax to promote tourism and the convention and hotel ~ndustry by
advert~slng and conducting sohc~tat~ons and promotional programs to atu'aet tourists and convention
delegates or registrants to the mumclpahty or ~ts wcrmty, and
WHEREAS, the CHAMBER ~s well equipped to perform those actlwt~es, and
WHEREAS, T~x TAX COD~ §351 101(c) authorizes the CITY to delegate by contract w~th
the CHAMBER, as an independent entity, the management and supervision of programs and
act~wt~es of the type described heremabove funded w~th revenue fi.om the mumc~pal hotel
occupancy tax,
NOW, THEREFORE, m consideration of the performance of the mutual covenants and
promises contained here~n, the CITY and the CHAMBER agree and contract as follows
L HOTEL TAX REVENUE PAYMENT
1 1 Consideration. For and m conslderatmn of the actlwt~es to be performed by the
CHAMBER under flus Agreement, the CITY agrees to pay to the CHAMBER a pomon of the hotel
tax revenue collected by the CITY at the rates and m the manner specified hereto (such payments by
the CITY to the CHAMBER sometuues here~n referred to as the "agreed payments" or "hotel tax
funds")
1 2 Amount of Payments
(a) As used ~n flus Agreement, the following terms shall have the followmg specific
meanings
0) The term "hotel tax revenue" shall mean the gross momes collected and
received by the C~ty as mumc~pal hotel occupancy tax at the rate of seven percent (7%) of
the price pa~d for a room ~n 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 "Collact~on period" w~ll mean the collection period for the CITY's
fiscal year It vall include hotel tax revenue due to the City for the relevant fiscal year and
collected through the 22nd day of the month following the close of the relevant fiscal year
0u) The term "base payment amount" shall mean a net amount of money equal
to the total hotel tax revenue collected by the CITY during any relevant period of t~me (t e,
fiscal year or fiscal quarter), less (1) attorney and auchtmg costs incurred dunng such
relevant period of ttme for costs of collection or auditing of hotel taxpayers Attorney and
aurhtmg costs include fees paid to attorneys or agents not m the regular employ of the CITY
for winch attorneys or agents effect eomphanee or collection of the hotel tax from taxpayers,
and (2) court costs and other expenses ~ncurred m htagat~on against or auditing of such
taxpayers
0v) The term "contract quarter" shall refer to any quarter of the calendar year m
wluch tlus Agreement ~s m force Contract quarters w~ll end on March 31st, June 30th,
September 30th, and December 31st of each contract year
(b) In return for satisfactory performance of the activities set forth m tlus Agreement
and all attachments hereto, the CITY shall pay to CHAMBER an amount of money m each
contract year equal to the lesser amount of One and Forty F~ve Hundreths percent (1 45%) of
the annual base payment amount or the fixed contract amount of Fourteen Thousand Dollars
($14,000) This amount w~ll be divided into quarterly payments equal to 25% of the annual fixed
contract amount, unless the City can show w~th reasonable certmnty that the annual base
payment amount will be less than originally estimated for the fiscal year The fourth quarterly
payment will represent 25% of the fixed contract amount or the unpaid remainder of 1 45% of
the base payment amount, whichever is less Each quarterly payment ~s subject to receipt of
unused funds from the prior contract period and the receipt of the reqmred quarterly reports
1.3 Dates of Payments.
(a) The term "quarterly payments" shall mean payments by the CITY to the BUREAU
of those amounts specified m ¶1 2, above, as determined by the hotel tax revenue collected
(b) Each quarterly payment shall be prod upon receipt of the required reports and
after the 25th day following the last day of the contract quarter If quarterly financial and
performarlce reports are not received within tlurty (30) days of the end of the apphcable contract
quarter, the recipient may be held m breach of th~s Agreement The CITY may withhold the
quarterly payment(s) until the appropriate reports are received and approved, wluch approval shall
not unreasonably be w~thheld
1.4 Other nmitations regarding consideration
(a) The funding of th~s project m no way commits the CITY to future funding of tins
program beyond the current contract period Any future funding ts solely the respons~inhty of the
CHAMBER
Co) It is expressly understood that tins contract m no way obhgates the General Fund or
any other momes or credits of the CITY
(c) CITY may w~thhold further allocations ~f CITY determines that CHAMBER's
expenchtures devlato materially from their approved budget
II, USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and m cons~deratton of the payment by the CITY to the CHAMBER of
the agreed payments of hotel tax funds specffied above, the CHAMBER agrees to use such hotel tax
funds only for advertising and conducting sohc~tatmns and promotmnal programs to attract tourists
and conventton delegates or registrants to the mumc~pahty or ~ts wc~mty, as well as the promotmn
of tourism through the encouragement, pmmotmn, ~mprovement, and apphcatmn of the arts,
mcludlng,mstmmental and vocal music, dance, drama, folk art, creative writing, arcintecture, design
and alhed fields, painting, sculpture, photography, grapinc and craft arts, motion p~ctures, radio,
televls~on, tape and sound recordmg, and other arts related to the presentation, performance,
exeeutmn, and extub~t~on of these major art forms, as authorized by T~x TAX COOE §351 101(a)
Funds for any calendar year winch are unused by m~dmght December 31st of that year shall be
refunded to CITY w~thm tinrty (30) days
2.2 Administrative Costs. The hotel tax funds received from the CITY by the CHAMBER
may be spent for day-to-day operatmns, office supphes, salanes, travel expenses, and other
adm~mstrat~ve costs that are ancurred chrectly m the performance by the CHAMBER of those
act~wt~es speeffied m ¶2 1 above and are allowed by TEx TAX Cove §351 101(f)
2.3 Specific Restrictions on Use of Funds.
(a) That port~on of total adrnlmstratlve costs of the CHAMBER for winch hotel tax funds
may be l~sed shall not exceed that port~on of the CHAMBER's admm~strat~ve costs actually
~ncurred m conducting the actav~ttes 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
act~wty the primary purpose of winch is not d~rectly related to the promotion of local tourism and
the conventton and hotel industry or the performance of the person's job ~n an efficient and
professional manner
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3 1 Budget.
(a) The CHAMBER shall prepare and subunt to the C~ty Manager of the CITY an annual
budget (see Exlubtt "A") as approved by the City Council for each calendar year, for such
operations of the CHAMBER m winch the hotel tax funds shall be used by the CHAMBER Tins
budget shall specifically Identify proposed expenditures of hotel tax funds by the CHAMBER In
other words, the CITY should be able to audit specifically where the funds m the separate checking
account relating to hotel tax funds wall be expended The CITY shall not pay to the CHAMBER
any hotel tax revenues as set forth m Section I of tins contract dunng any fiscal year of tins
Agreement unless a budget for such respective fiscal year has been approved m writing by the
Denton C~ty Council authorizing the expenchture of funds Failure to subrmt an annual budget may
be considered a breach of contract, and af not remedied IS considered grounds for termination of tlus
Agreement as stated an paragraph 4 2
(b) The CHAMBER acknowledges that the approval of such budget by the Denton City
Council creates a fiduciary duty in the CHAMBER with respect to the hotel tax funds pa~d by the
CITY to the CHAMBER under tins Agreement The CHAMBER shall expend hotel tax funds only
in the manner and for the purposes specified ~n ttus Agreement, TEx T^x Co~)E §351 101(a) and in
the budget as approved by the CITY
3.2 Separate Accounts. The CHAMBER shall maintain any hotel tax funds paid to the
CHAMBER by the CITY an a separate bank checking account wtth segregated accounting, such
that any reasonable person can review the source of expenditures of tax funds A bank
reconcthataon report (see Exhibit "B") as reqmred w~th each quarterly report
3 3 Financial Records The CHAMBER shall maintain complete and accurate financial
records of each expenditure of the hotel tax funds made by the CHAMBER These funds are
required to be classified as restnetod funds for aurhted financial purposes, and may not be used for
supporting seraees, ~ncludmg, but not hmated to, auditing fees and attorney's fees Upon
reasonably advance written request of the Denton City Council, the C~ty Manager or designate, or
any other person, shall make such financial records available for inspection and review by the party
making the request CHAMBER understands and accepts that all such financial records, and any
other records relating to tins Agreement shall be subject to the Public Information Act, Tex Gov'T
Co~)e, ch 552, as hereafter amended
3 4 Quarterly Reports. After untaal receipt of hotel tax funds, and w~tinn thirty days after the
end of every quarter thereafter, until all funds have been expended and reported to the CITY,
CHAMBER shall furmsh to CITY (1) a performance report of the work performed under tins
Agreement describing the actlVltaes performed pursuant to flus Agreement dunng that contract
quarter, (2) a hst of the expenditures made with regard to hotel tax funds pursuant to Tnx T^x
Co~)~ §351 101(e), and (3) a copy of all financial records (e g, receipts, invoices, bank statements,
and other relevant documentation) Both the performance and expenditure reports will be in a form
either determined or approved by the City Manager or designate (see Exinb~t "B") The
CHAMBER shall respond promptly to any request from the C~ty Manager of the CITY, or
designate, for ad(htaonal mformat~on relating to the actavltles performed under tins Agreement
3.5 Notice of Meetings. The CHAMBER shall give the City Manager of the CITY reasonable
advance wrttten not,ce of the tame and place of all meetings of CHAMBER's Board of Directors, as
well as any other meeting of any constituency of the CHAMBER at winch this Agreement or any
matter the subject of ti'ns Agreement shall be considered Tins provision shall not be deemed to
reqmre the CHAMBER to g~ve not,ce of any executive session of the Executive Committee of the
CHAMBER
IV. TERM AND TERMINATION
4.1 Term. The term of ttus Agreement shall commence on January 1, 2002 and terminate at
m~dmght on December 31, 2002 Thts term shall be a penod of one year
4.2 Termination Without Cause.
(a) Ttus Agreement may be terminated by eaher party, with or w~thout cause, by g~wng
the other party s~xty (60) days advance wntten notme
(b) In the event th~s contract m terminated by e~ther party pursuant to Section 4 2(a),
the CITY agrees to reimburse the CHAMBER for any contractual obhgatmns of the CHAMBER
undertaken by the CHAMBER m satisfactory performance of those activities specffied m ¶¶2 1
and 2 2 above and that were approved by the Council through the budget, as noted m ¶3 1 Th~s
reimbursement ~s conditioned upon such contractual obhgatmns hawng been recurred and
entered ~mo m the good froth performance of those servmes contemplated m ¶¶2 1 and 2 2 above,
and further eonchtmned upon such contractual obligations hawng a term not exceeding the full
term ofth~s Agreement Notwithstanding any pmws~on hereof to the comrary, the obligation of
the CITY to reimburse the CHAMBER or to assume the performance of any contractual
obhgat~ons of the CHAMBER for or under any contract entered into by the CHAMBER as
contemplated hereto shall not exceed 66 2/3% of the current quarterly payment
(c) Further, upon terra,natron pursuant to ¶4 2(a), the CHAMBER will prowde the
CITY 1) W~ttun 10 busmass days fi.om the termination notffieatlon, a short-term budget of
probable expenditures for the remaamng 60 day penod between termination notfficat~on and
contract termmatmn Th~s budget will be presented to Council for approval within 10 bus~ness
days after receipt by CITY If formal approval ~s not g~ven w~tlun 10 business days and the
budget does not contmn any expendttures 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 prewously authted by the
C~ty, 3) W~thrn 5 business days of a request from the CITY, a hstmg of expenthtures that have
occurred since the last reqmred reporting penod, 4) a final accounting of all expenditures and tax
funds on the day of term~natmn The CHAMBER will be obligated to return any unused funds or
funds determined to be used ~mproperly Any use of remaining funds by the CHAMBER after
notfficatmn of termmatmn ~s cond~twned upon such contractual obhgatlons hawng been incurred
and entered ~nto m the good froth performance of those services contemplated m 2 1 and 2 2
above, aad further cond~tuoned upon such contractual obhgat~ons hawng a term not excee(hng
the full term ofth~s Agreement
4.3 Automatic Termination. Tins Agreement shall automatically terminate upon the
occurrence of any of the following events
(a) The tenmnatmn of the legal existence of the CHAMBER,
(b) The msolvency o£ the CHAMBER, the fihng of a petition m bankruptcy, e~ther
voluntarily or mvoluntanly, or an assignment by the CHAMBER for the benefit of creditors,
(e) The continuation of a breach of any o£ the terms or conditions of tl~s Agreement by
either the CITY or the CHAMBER for more than tl~rty (30) days after wn~en not~ee of
such breach m g~ven to the breac~ng party by the other par~y, or
(d) The fmlure of the CHAMBER to submit a financial quarterly report wbaeh enmphes
with the reporting procedures reqmred here~n and generally accepted accounting pnnc~ples
prior to the begmmng of the next contract term, or quarterly as reqmred by Section 1 3
hereof
4.4 Right to Immediate Termination Upon Litigation Notwithstanding any other prows~on
of flus Agreement, to mitigate damages and to preserve ewdence and ~ssues for jud~mal
determmat~on, e~ther party shall have the right to terminate this Agreement upon lmmedmte
notice to the other party in the event that any person has instituted ht~gatton concerning the
activities of the non-terminating party, and the terminating party reasonably believes that
such act~wtles are reqmred or protublted under tlus Agreement
4 $ In the event that flus Agreement is terminated pursuant to ~[~]4 3 or 4 4, CHAMBER agrees
to refund any and all unused funds, or funds determined by the CITY to have been used
improperly, wlttun 30 days after termination of this Agreement
V. GENERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in flus Agreement shall prolub~t, nor
be construed to prohibit, the agreement by the CHAMBER w~th another private enlaty, person, or
organization for the performance of those servmes described m ~12 1 above In the event that the
CHAMBER enters rote any arrangement, contractual or otherwise, with such other entity, person or
organization, the CHAMBER shall cause such other entity, person, or orgamzat~on to adhere to,
conform to, and be subject to all provisions, terms, and cond~t~ous of tlus Agreement and to TEx
TAX CODE ch 351, including repo~ng mqmrements, separate funds maintenance, and llm~tataons
and prohlbtt~ons pertatmng to expendtture of the agreed payments and hotel tax funds
5.2 I~idependent Contractor. The CHAMBER shall operate as an independent contractor as
to all services to be performed under this Agreement and not as an officer, agent, servant, or
employee of the CITY The CHAMBER shall have exclusive control of ~ts operations and
performance of serwces hereunder, and such persons, ent~t~es, or orgamzat~ons performing the same
and the CHAMBER shall be solely responsible for the acts and omass~ous of its directors, officers,
employees, agents, and subcontractors The CHAMBER shall not be considered a partner or jmnt
venturer wath the CITY, nor shall the CHAMBER be considered nor in any manner hold itself out
as an agent or official representative of the CITY
5 3 IUdenmffieation. THE CHAMBER AGREES TO INDEMNIFY, HOLD
HARMLESS, AND DEFEND THE 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 THE CHAMBER 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 CHAMBER, ITS OFFICERS, EMPLOYEES,
AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES.
5.4 Assignment. The CHAMBER shall not assign this Agreement without first obtaining the
written consent of the CITY
5 5 Notice. Any notice required to be given under flus Agreement or any statute, orthnance, or
regulation, shall be effective when g~ven m wnt~ng and deposited m the Umtcd States mml, certtfied
mml, return receipt requested, or by hand-dehvery, addressed to the respectlve part,es as follows
CITY CHAMBER
City Manager Denton Black Chamber of Commerce
City of Denton Ehhu Gfllesp~e
215 E MeKmney P O Box 51026
Denton, TX 76201 Denton, Texas 76206
5 6 Inurement. Th~s Agreement and each provision hereof, and each and every right, duty,
obhgat~on, and habahty set forth hereto shall be binding upon and inure to the benefit and obhgat~on
of the CITY and the CHAMBER and their respective successors and assigns
5.7 Application of Laws. All terms, conditions, and provisions of this Agreement are subject
to all appheable federal laws, state laws, the Charter of the C~ty of Denton, all ordinances passed
pursuant thereto, and all judicial determinations relative thereto
5 8 Exclusive Agreement. Tlus Agreement contains the enUre understanding and constitutes
the entire agreement between the part, es hereto concermng the subject matter contained herein
There are no representations, agreements, arrangements, or understandings, oral or written, express
or lmphed, between or among the pames hereto, relating to the subject matter of ttus Agreement,
which are not fully expressed hereto The terms and condmons of flus Agreement shall prevml
notwithstanding any variance an this Agreement from the terms and conditions of any other
document relating to this transaction or these transactions
5 9 Duplicate Originals. Th~s Agreement ~s executed ~n duplicate originals
$.10 Headings. The headings and subheadings of the vinous sections and paragraphs of this
Agreement are inserted merely for the purpose of convenience and do not express or nnply any
himtat~on, defimt~on, or extension of the specific terms of the section and paragraph so designated
5.11 Severablhty. If any section, subsection, paragraph, sentence, clause, phrase or word in flus
Agreement, or apphcat~on thereof to any person or c~rcumstance ~s held ~nvalld by any court of
competent jurisdiction, such holding shall not affect the validity of the remmmng po~ons of th~s
Agreement, and the parties hereby declare they would have enacted such remalmng pomons despite
any such mvall(hty
5.12 Insurance. The CHAMBER shall, at a mlmmum, provide insurance as follows
$500,000 Commercial General Liability, or $1,000,000 Event Insurance, covenng
any event held on C~ty property
Statutory Workers' Compensation and Employers' Lmblhty
($100,000/$500,000/$100,000)
$500,000 Business Automobile Lmbfllty on any owned, non-owned or hired
vebacles
The CITY must be named as an ad6hUonal insured on all pohc~es (except Workers' Compensation)
and proof of coverage shall be submitted prior to any payment by the CITY
EXECUTED tlus 4~--/~day of .k~ ~7~/~/ ,2001
By ~,~2~
ATTEST APP~
c YSEC T Y OF
Chm~rec~r /
ATTEST ~PROVED AS TO LEG~ FO~
By By
Secretary
EXHIBIT A
Denton Black Chamber of Commerce
Blues Fest/wl
Program Year 2002
ADVERTISING
Newspaper $ 3,000 00
Fesbval Brochure $ 2,000 00
Internet, Billboard and Cop~es $ 2,000 00
Radio $ 3,000 00
$10,000 00
ART
Arbst $ 4,000 00
$ 4,000 00
$14,000 O0
SAMPLE FINANCIAL REPORT Exhibit B
Program Year 2002
1ST 2ND 3RD 4TH YEAR
QUARTER QUARTER QUARTER QUARTER to
(APR - JUN) (JUL - SEP) (OCT. DEC) DATE
$0 O0 $0 O0 $0 O0 $0 O0
$0 O0 $0 O0 $0 O0 $0 O0 $0 O0
$0 O0 $0 O0 $0 O0 $0 O0 $0 O0
$0 O0 $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 $o oo $o oo
$o oo $o oo $o oo $o oo $o oo
$o oo $o oo $o oo $o oo $o oo
$0 O0 $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 $o oo $o oo
Date Submitted Program Director