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2001-331 O~IN~CE NO d~/- ~5/ AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE TEJAS STORYTELLING ASSOCIATION, 1NC, 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 ~s hereby authorized to execute an agreement between the C~ty of Denton and the Tejas Storytelhng Association, Inc for the payment and use of hotel tax revenue, under the terms and con&tlons contained m the agreement, a copy of which ~s attached hereto and made a part hereof SECTION II That th~s ordinance shall become effective ~mme&ately upon ~ts passage and approval ,2oo EUL1NE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERB~ AGREEMENT BETWEEN THE CITY OF DENTON AND TEJAS STORYTELLING ASSOCIATION, INC (CY2002) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE TI-IlS AGREEMENT made between the City of Denton, Texas, a murnclpal corporatton (the "CITY"), and the Tejas Storytelling Assocmtton, Inc, a legal entity incorporated under the laws &the State of Texas (the "ASSOCIATION") WHEREAS, T~x TAx Coo~ §351 002 anthonzes the CITY to levy by ordinance a municipal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the conslderataon prod by a hotel occupant, and WHEREAS, by ordinance, the CITY has provided for the assessment and colleclaon of a mumclpal hotel occupancy tax m the City of Denton of seven percent (7%), and WHEREAS, TEX T^x CODE §351 101(a) authonzes the CITY to use revenue from its mumclpal ,hotel occupancy tax to promote tounsm and the conventton and hotel industry by advertising and conducting sOhCltat~ons and promottonal programs to attract tourists and conventton delegates or registrants to the mumc~pahty or ~ts vicinity, and WHEREAS, the ASSOCIATION ~s well eqmpped to perform those activities, and WHEREAS, TEx T^x Cooe §351 101(c) anthonzes the CITY to delegate by contract w~th the ASSOCIATION, as an ~ndependent entity, the management and supervlsmn of programs and actlmties of the type described heremabove funded with revenue from the mumclpal hotel occupancy tax, NOW, THEREFORE, m cons~deratmn of the performance of the mutual covenants and promises qontamed herein, the CITY and the ASSOCIATION agree and contract as follows L HOTEL TAX REVENUE PAYMENT 1.1 Consideration. For and ~n eons~deratton of the actlvlttes to be performed by the ASSOCIATION under ttus Agreement, the CITY agrees to pay to the ASSOCIATION a port~on of the hotel tax revenue collected by the CITY at the rates and m the manner specified herein (such payments, by the CITY to the ASSOCIATION sometimes hereto referred to as the "agreed payments? or "hotel tax funds") 1.2 Amount of Payments. (a) As used m this Agreement, the following terms shall have the following specffic meanings: 0) The term "hotel tax revenue" shall mean the gross momes collected and regelved by the City as mun~mpal hotel occupancy tax at the rate of seven percent (7%) of the price pard for a room ~n a hotel, pursuant to Texas Tax Code 351 002 and City Ordxnance Hotel tax revenue wxll ~nchide penalty and xnterest related to the late payments of the tax revenue by the taxpayer 00 The term "Collection period" wdl mean the collection period for the CITY's fiscal year It w~ll include hotel tax revenue due to the Cxty for the relevant fiscal year and collected through the 22nd day of the month following the close of the relevant fiscal year 0n) The term "base payment amount" shall mean a net amount of money equal to the total hotel tax revenue collected by the CITY dunng any relevant period of tame (t e, fiscal year or fiscal quarter), less (1) attorney and auchtxng costs ~ncurred dunng such relevant period of t~me for costs of collection or auchtxng of hotel taxpayers Attorney and auditing costs include fees prod to attorneys or agents not m the regular employ of the CITY forlwhich attorneys or agents effect comphance or collectxon of the hotel tax fi'om taxpayers, and (2) court costs and other expenses incurred ~n ht~gat~on agmnst or auditing of such taxpayers 0v) The term "contract quarter" shall refer to any quarter of the calendar year ~n which this Agreement ~s m force Contract quarters wxll end on March 31st, June 30th, September 30th, and December 31st of each contract year (b) In return for satmfaetory performance of the actxwt~es set forth m this Agreement and all attachments hereto, the CITY shall pay to ASSOCIATION an amount of money m each contract year equal to the lesser amount of Fxve and Seventy One Hundredths percent (5 70%) of the annual base payment amount or the fixed contract amount of Fffiy-F~ve Thousand Dollars ($55,000) This amount will be d~wded ~nto 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 estunated for the fiscal year The fourth quarterly payment w~ll represent 25% of the fixed contract amount or the unpaid remainder of 5 70% of the base l~ayment amount, whichever ~s less Each quarterly payment ~s subject to receipt of unused funds from the prior contract period and the recexpt of the reqmred quarterly reports 1 3 Dates of Payments to ASSOCIATION. (a) The term "quarterly payments" shall mean payments by the CITY to the ASSOCIATION of those amounts specffied m ¶1 2, above, as determxned by the hotel tax revenue collected (b) Each quarterly payment shall be paid upon recexpt of the reqmred reports and after the 25th day following the last day of the contract quarter If quarterly financxal and performance reports are not recelved wxthm thirty (30) days of the end of the apphcable contract quarter, the rempxent may be held m breach of this Agreement The CITY may w~thhold the quarterly payment(s) until the appropriate reports are recexved and approved, wbach approval shall not unreasonably be w~thheld 1.4 Other limitations regarding consideration. (a) The funding of thns project in no way commits the CITY to future funding of tlus program beyond the current contract period Any future funchng ns solely the responslblhty of the ASSOCIATION (b) It ns expressly understood that ttus contract in no way oblngates the General Fund or any other momes or credits of the CITY (c) CITY may w~thhold further allocations if CITY determines that ASSOCIATION's expenditures demate materially from their approved budget II. USE OF HOTEL TAX REVENUE 2 1 Use of]Funds For and in cons~deratmn of the payment by the CITY to the ASSOCIATION of the agreed payments of hotel tax funds specified above, the ASSOCIATION agrees to use such hotel tax funds only for advertzsmg and conducting sohcntatlons and promotional programs to attract tourists and conventnon delegates or registrants to the munlc~pahty or ~ts vmunty, as well as the promotion ~of tourism through the encouragement, promotion, ~mprovement, and apphcat~on of the arts including instrumental and vocal music, dance, drama, folk art, creatnve writing, arclutecture, desxgn and alined fields, pmntmg sculpture, photography, grapluc and craft arts, motion pictures, radio, telemsnon, tape and sound recmdmg and other arts related to the presentation, performance, execution and exhthnt~on of these major art forms as authorized by TEx TAX COOE §351 101(a) Funds for any calendar year whnch are unused by midmght December 31st of that year shall be refunded to CITY wnthm tturty (30) days 2.2 Administrative Costs. The hotel tax funds received from the CITY by the ASSOCIATION may be spent for day-to-day operal~ons, office supphes, salaries, travel expenses, and other admunstratlve costs that are nncurred d~rectly xn the performance by the ASSOCIATION of those actxwtnes specified xn ¶2 1 above and are allowed by TEx TAX COOE §351 101(f) 2 3 Specific Restrictions on Use of Funds. (a), That porUon of total adnumstrat~ve costs of the ASSOCIATION for wtuch hotel tax funds may be used shall not exceed that po~on of the ASSOCIATION's admnmstrative costs actually ~ncurred m conducting the activities specified m ¶2 1 above Co) Hotel tax fimds may not be spent for travel for a person to attend an event or conduct an acUvlty the primary purpose ofwlueh is not d~rectly related to the promotion of local tourism and the cunventmn and hotel industry or the performance of the person's job ~n an efficient and professnonal manner III. RECORDKEEPING AND REPORTING REQUIREMENTS 3 1 BUdget. (a) The ASSOCIATION shall prepare and submit to the C~ty Manager of the CITY an annual budget (see Exlublt "A") as approved by the City Councd for each calendar year, for such operations of the ASSOCIATION ~n wtuch the hotel tax funds shall be used by the ASSOCIATION Tins budget shall specifically ~dent~fy proposed expenrhtures of hotel tax funds by the ASSOCIATION 'in other words, the CITY should be able to autht specffically where the funds ~n the separate checlang account relating to hotel tax funds will be expended The CITY shall not pay to the ASSOCIATION any hotel tax revenues as set forth m Section I of thts contract dunng any fiscal year of thts Agreement unless a budget for such respective fiscal year has been approved ~n writing by the Denton C~ty Council authonz~ng the expenditure of funds Fmlure to subrmt an annual budget may be constdered a breach of contract, and if not remedied ~s considered grounds for termination oftlus Agreement as stated m paragraph 4 2 (b) The ASSOCIATION acknowledges that the approval of such budget by the Denton C~ty Council creates a fiducmry duty m the ASSOCIATION with respect to the hotel tax funds ptud by the CITY to the ASSOCIATION under ttus Agreement The ASSOCIATION shall expend hotel tax funds only m the manner and for the purposes specffied ~n tins Agreement, Tnx T^x COl)~ §351 101(a) and m the budget as approved by the CITY 3.2 Separate Accounts. The ASSOCIATION shall maintain any hotel tax funds pa~d to the ASSOCIATION by the CITY m a separate bank checking account w~th segregated accounting, such that any reasonable person can rewew the source of expenditures of tax fimds A bank reconcd~ation report (see Exluba "B") ns reqmred w~th each quarterly report 3.3 Financial Records. The ASSOCIATION shall manntmn complete and accurate financml records of each expenrhture of the hotel tax funds made by the ASSOCIATION These funds are reqmred to be classffied as restricted funds for audited financial proposes, and may not be used for suppomng serwces, including, but not ln~lted to, aurhtmg fees and attorney's fees Upon reasonably advance written request of the Denton C~ty Councd, the C~ty Manager or designate, or any other person, shall make such fmancml records avmlable for ~nspectmn and rewew by the party malang the request ASSOCIATION understands and accepts that all such financial records, and any other records relating to th~s Agreement shall be subject to the Pubhc Information Act, Tex Gov'T Corm, ch 552, as hereafter amended 34 Quarterly Reports. W~thm thniy days after the end of every contract quarter, ASSOCIATION shall funush to CITY (1) a performance report of the work performed under tlus Agreement deacnbmg the act~wt~es performed pursuant to tlus Agreement dunng that contract quarter, (2) a hst of the expenchtures made w~th regard to hotel tax funds pursuant to T~x T^x Cot)~ §351 101 (c), and (3) a copy of all financml records (e g, receipts, mvmces, bank statements, and other relevant documentation) Both the performance and expenditure reports will be ~n a form e~ther determmed or approved by the C~ty Manager or designate (see Exhibit "B") The ASSOCIATION shall respond promptly to any request from the C~ty Manager of the CITY, or destgnate, for adcht~onal mformat~on relating to the activities performed under tlus Agreement 3 5 Notice of Meetings The ASSOCIATION shall g~ve the C~ty Manager of the CITY reasonable advance written not,ce of the t~me and place of all meetmgs of ASSOCIATION's Board of D~rectors, as well as any other meeting of any consutuency of the ASSOCIATION at wluch th~s Agreement or any matter the subject of tlus Agreement shall be considered Th~s prows~on shall not be deemed to reqmre the ASSOCIATION to g~ve notme of any exacut~ve session of the Executive Committee of the ASSOCIATION IV. TERM AND TERMINATION 4 1 Term. The term of flus Agreement shall commence on January 1, 2002 and terminate at mldmght on December 31, 2002 Ttus term shall be a period of one year 4.2 Termination Without Cause. (a) Tlus 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 ASSOCIATION for any contractual obhgatlons of the ASSOCIATION undertaken by the ASSOCIATION m satisfactory performance of those activities specified m ¶¶2 1 and 2 2 above and that were approved by the Council through the budget, as noted m ¶3 1 This reimbursement is conditioned upon such contractual obhgatlons having been incurred and entered into m the good faith performance of those services contemplated m ¶¶2 1 and 2 2 above, and further conditioned upon such contractual obligations having a term not exceedmg the full term of this Agreement Notwithstanding any provision hereof to the contrary, the obligation of the CITY to reimburse the ASSOCIATION or to assume the performance of any contractual obligations of the ASSOCIATION for or under any contract entered into by the ASSOCIATION as contemplated herem shall not exceed 66 2/3% of the current quarterly payment (c) Further, upon termination pursuant to ¶4 2(a), the ASSOCIATION will provide the CITY 1) Wlflun 10 business days from the termination notification, a short-term budget of probable expenditures for the rema~mng 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 CITY If formal approval is not given witlun 10 business days and the budget does not contain any expenditures that would be prohibited by the Texas Tax Code, and is wlthm 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 the City, 3) Within 5 business days of a request from the CITY, a listing of expenditures that have occurred since the last required reportang period, 4) a final accounting of all expenditures and tax funds on the day of termination The ASSOCIATION will be obligated to return any unused funds or funds determined to be used improperly Any use of remalnmg funds by the ASSOCIATION after notification of termination is conditioned upon such contractual obhgatlons having been incurred and entered into in the good faith performance of those services contemplated m 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. Tlus Agreement shall automatically terminate upon the occurrence of any of the following events (a) The termmatton of the legal existence of the ASSOCIATION, (b) The m_solvency of the ASSOCIATION, the filing of a petition in bankruptcy, either voluntarily or involuntarily, or an assignment by the ASSOCIATION for the benefit of erechtors, (c) The contanuatton of a breach of any of the terms or condmons of tins Agreement by either the CITY or the ASSOCIATION for more than tinny (30) days after written not, ce of such breach is g~ven to the breacinng party by the other party, or (d) The ftulure of the ASSOCIATION to submit a financial quarterly report winch comphes w~th the reporting procedures required hereto and generally accepted accountmg pnnclples prior to the begmnmg of the next contract term, or quarterly as required by Section I 3 hereof 4 4 Right to Immediate Termmatlon Upon L~tigation Notwithstanding any other provision of tins Agreement, to nut,gate damages and to preserve evidence and issues for judicial determination, either party shall have the right to terminate tins Agreement upon immediate nottce to the other party m the event that any person has instituted htlgat~on concermng the act~xataes of the non-tenmnatmg party, and the terminating party reasonably beheves that such act~wt~es are reqmred or prohibited under tins Agreement 4.5 In the event that tins Agreement is terminated pursuant to ¶¶4 3 or 4 4, ASSOCIATION agrees to refund any and all unused funds, or funds determined by the 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 ~n tins Agreement shall prohibit, nor be construed to proinint, the agreement by the ASSOCIATION w~th another private entity, person, or orgamzatton for the performance of those servmes described ~n ¶2 1 above In the event that the ASSOCIATION enters rote any arrangement, contractual or otherwise, w~th such other entity, person or orgamzatton, the ASSOCIATION shall cause such other entity, person, or orgamzat~on to adhere to, conform to, and be subject to all prows~ons, terms, and conchtlons of tins Agreement and to TEx T^x COBB ch 351, including repo~ng requirements, separate funds maintenance, and hnutat~ons and proinblttons pertmnmg to expenchture of the agreed payments and hotel tax funds 5.2 Independent Contractor. The ASSOCIATION shall operate as an mdependent contractor as to all sermces to be performed under tins Agreement and not as an officer, agent, servant, or employee of the CITY The ASSOCIATION shall have exclusive control of its operations and performance of services hereunder, and such persons, entxt~es, or orgamzatlons performing the same and the ASSOCIATION shall be solely responsible for the acts and on'nsslons of ~ts directors, officers, employees, agents, and subcontractors The ASSOCIATION shall not be considered a partner or joint venturer with the CITY, nor shall the ASSOCIATION be considered nor ~n any manner hold itself out as an agent or official representative of the CITY 53 Inflemnffieation. THE ASSOCIATION 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 ASSOCIATION OR THOSE SERVICES CONTEMPLATED BY THIS AGREEMENT, INCLUDING ALL SUCH CLAIMS OR CAUSES OF ACTION BASED UPON COMMON, CONSTITUTIONAL OR STATUTORY LAW, OR BASED, 1N WHOLE OR IN PART, UPON ALLEGATIONS OF NEGLIGENT OR INTENTIONAL ACTS OF ASSOCIATION, ITS OFFICERS, EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES. 5 4 Assignment. The ASSOCIATION shall not assign this Agreement without first obtmmng the written consent of the CITY S S Notice. Any notice mqmred to be given under flus Agreement or any statute, ordanance, or regulation, shall be effeeUve when given m writing and deposited in the Umted States mml, certified mml, return receipt requested, or by hand-dehvery, addressed to the respective part,es as follows CITY ASSOCIATION City Manager Tejas Storytelhng Association, Inc City of Deaton Karen Morgan 215 E MeKnmey P O Box 2806 Denton, TX 76201 Denton, Texas 76202-2806 5 6 Inurement. This Agreement and each provision hereof, and each and every right, duty, obligation, and hablhty set forth hereto shall be binding upon and inure to the benefit and obligation &the CITY and the ASSOCIATION and their respective successors and assigns 5.7 Application of Laws All terms, conditions, and prowslons of flus 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 judlmal detenmnatlons relative thereto 5 8 Exclusive Agreement. Tins Agreement contmns the entire understanding and constitutes the entire agreement between the parttes hereto concerning the subject matter contained heroin There are no representations, agreements, arrangements, or anderstandlngs, oral or written, express or lmphed, between or among the pames hereto, relating to the subject matter of flus Agreement, winch are not fully expressed hereto The terms and con(htlons of flus Agreement shall prevml notwlthstanchng any variance m flus Agreement from the terms and conditions of any other document relating to tins transaction or these transactions 5.9 Duplicate Originals. This Agreement ~s executed in duplicate ongmals 5 10 }leadings. The headings and subheadings of the various sections and paragraphs of flus Agreement are inserted merely for the purpose of convemence and do not express or imply any llnutataon, defimtnon, or extension of the specific terms of the section and paragraph so designated 5 11 Severabiiity If any section, subsectaon, paragraph, sentence, clause, phrase or word in flus Agreement, or epphcat~on thereof to any person or circumstance is held invalid by any court of competent lunschctton, such holding shall not affect the validity of the remaining portions of flus Agreement, and the pames hereby declare they would have enacted such remalmng pomons despite any such mvahchty 5.12 Insurance. The ASSOCIATION shall provide insurance as follows 1 $500,000 Commercial General Lmblhty, or $1,000,000 Event Insurance, covenng all events taking place on C~ty-owned property 2 Statutory Workers' Compensation and Employers' L~ab~hty ($100,000/$500,000/$100,000) The CITY must be named as an addmonal insured on all pohmes (except Workers' Compensation) and proof of coverage shall be subnutted prior to any payment by the CITY EXECUTED ttus 4~l~day of ~ 7~/~C/ ,2001 THE CITY OF DENTON, TEXAS EUL1NE BROCK, MAYOR j~i~ilF'ER~WAL~E~S~ - /~ ~..~B'~L PROUTY, J r J)S STO Y rE NO. SSOCI^'rION, By Chmfi'na~ffDlt~ector ~ ATTEST APPROVED AS TO LEGAL FORM By By Secretary Exhibit A Tejas Storytelling Association Tejas Storytelling Festival Program Year 2002 Rec~ueeted Amount ADVERTISING $12,000 00 Newspaper, TV and Magazine $ 7,000 00 Marketing and Promotion $ 4,000 00 Flyers and Brochures $ 4,500 00 Maihng Cost $ 1,300 00 Webs~ta $ 2,500 00 V~deo and Still Photo~lraph~' $ 3t,300 00 ART Performers,Fees $ 6,50000 S~ta Operations $ 1,500 00 Tents, chair and stage rental $ 800 00 Sound and L~ght~ng $ 500 00 S~te Insurance $ 9,300 00 HISTORICAL Performers' Fees $ 6,500 00 S;te Operations Tents, chair and stage rental $ 5,000 00 Sound and Lighting $ 1,000 00 Women's Building Rental $ 700 00 Llabdlty Insurance $ 1,200 00 $14,400 00 $ 66~000 O0 SAMPLE FINANCIAL REPORT Exhibit B Program Year 2002 1ST 2ND 3RD 4TH YEAR QUARTER QUARTER QUARTER to (APR - JUN) (JUL - SEP) (OCT - DEC) DATE $o oo $o oo $o oo $o oo $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 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $0 00 $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $0 00 $0 oo $0 oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $o oo $0 oo $o oo $o oo $o oo $o oo $o oo Date Submitted Program Director