2000-302 ORDINANCE N0 dd~ -&0~
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE DENTON HOLIDAY FESTIVAL
ASSOCIATION, INC FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND
PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAiNS
SECTION I That the Mayor is hereby authorized to execute an agreement between the
C~ty of Denton and the Denton Holiday Festival Assomat~on, Inc for the payment and use of
hotel tax revenue, under the terms and conditions contained ~n the agreement, a copy of which is
attached hereto and made a part hereof
SECTION II That this or&nance shall become effective immediately upon its passage
and approval
PASSED AND APPROVED this the ~-~_~ day of C~f)~/./~ ,2000
EULINE BROCK, MAYOR
ATTEST'
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS~J~M~/~~
~~./..~HERBER Y
AGREEMENT BETWEEN THE CITY OF DENTON AND
DENTON HOLIDAY FESTIVAL ASSOCIATION, INC. (CY2001)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the Ctty of Denton, Texas, a mumctpal corporatmn
(the "CITY"), and the Denton Hohday Festtval Association, Inc, a legal entity ~nenrporated under
the laws of the State of Texas (the "ASSOCIATION")
WHEREAS, T~x TAX CODE §351 002 authorizes the CITY to levy by ordinance a
mumclpal hotel occupancy tax ("hotel tax") not exceedtng seven percent (7%) of the cons~deratton
p~ud by a hotel occupant, and
WHEREAS, by ordinance, the CITY has provtded for the assessment and collection of a
mumc~pal hotel occupancy tax m the Oty of Denton of seven percent (7%), and
WHEREAS, T~x TAx CODE §351 101(a) authorizes the CITY to use revenue fi.om 1ts
mumc~pal hotel occupancy tax to promote tourism and the convention and hotel ~ndustry by
adve~stng and conducting sohettatlons and promottonal programs to attract tourists and conventton
delegates or registrants to the mumetpahty or ~ts vtc~mty, and
VfcIEREAS, the ASSOCIATION is well equtpped to perform those acttVttles, and
WHEREAS, TEX TAX CODE §351 101(c) authorizes the CITY to delegate by contract w~th
the ASSOCIATION, as an mdependant entity, the management and supervtslon of programs and
acttvmes of the type described here~nabove funded wtth revenue fi.om the mumetpal hotel
occupancy tax,
NOW, THEREFORE, m consideration of the performance of the mutual covenants and
prormses contained hereto, the CITY and the ASSOCIATION agree and contract as follows
L HOTEL TAX REVENUE PAYMENT
1.1 C0nsiderat~on. For and m eonslderatuon of the acttwtles to be performed by the
ASSOCIATION under tlus 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 hereto (such
payments by the CITY to the ASSOCIATION somettmes hereto referred to as the "agreed
payments" or "hotel tax funds")
1.2 Amount of Payments.
(a) As used ~n this Agreement, the followmg terms shall have the followtng specific
meamngs,
(l) The term "hotel tax revenue" shall mean the gross momes collected and
received by the C~ty as mumelpal hotel occupancy tax at the rate of seven percent (7%) of
the pnee pa~d for a room m a hotel, pursuant to Texas Tax Code 351 002 and City
Ordinance Hotel tax revenue will ~nclude penalty and interest related to the late
payments of the tax revenue by the taxpayer
0O The term "Collection penod" will mean the collection period for the CITY's
fisgal year It will 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 enllected by the CITY during any relevant period of tmae (t e,
fiscal year or fiscal quarter), less (1) attorney and auditing costs ~ncurred dunng such
relevant period of time for costs of collection or auditing of hotel taxpayers Attorney and
audxtmg costs include fees paid to attorneys or agents not m the regadar employ of the CITY
for which attorneys or agents effect comphance or collection of the hotel tax f~om taxpayers,
and (2) enurt ensts and other expenses incurred m htigation against or andxt~ng of such
taxpayers
(iv) The term "contract quarter' shall refer to any quarter of the calendar year m
wtueh this Agreement is m force Contract quarters will end on March 31st, June 30th,
September 30th, and December 31"t of each contract year
(b) In return for satisfactory performance of the act~wt~es set forth an this Agreement
and all attachments hereto, the CITY shall pay to ASSOCIATION an amount of money an each
contract year equal to the fixed contract amount of Seven Thousand F~ve Hundred Dollars
($7,500) This amount will be d~wded ~nto no more than two payments Each 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 '~ayments" shall mean payments by the CITY to the ASSOCIATION of those
amounts speexfied ~n ¶1 2, above, as deterunned by the hotel tax revenue collected
(b) In return for the satisfactory performance of the actiwties set forth m this contract and
all attachments thereto, CITY shall pay the ASSOCIATION the agreed payments specified ~n ¶1 2
above by no more than two payments, payang the fixed contract amount dunng the 1st and 2nd
quarter of the calendar year Ifa second payment ~s due, that payment shall be pond upon receipt
of the reqmred reports and after the 25th day following the last day of the contract quarter If
quarterly financaal and performance reports are not received w~thin thirty (30) days of the end of the
apphcabl~ quarter, the recipient may be held m breach of this Agreement The CITY may w~thhold
the quarterly payment(s) until the appropriate reports are received and approved, which approval
shall not unreasonably be w~thheld
1 4 Other limitations regarding eonsideratmn
(a) The funding of this project ~n no way commits the CITY to future funihng of this
program l~eyond the current contract penod Any future funding ~s solely the respons~hihty of the
ASSOCIATION
Page 2
Co) It lS expressly understood that tins contract in no way obhgates the General Fund or any
other mon~es or crechts of the CITY
(c~ CITY may withhold further allocations if CITY determines that ASSOCIATION's
expenditures dewate materially from their approved budget
II. USE OF HOTEL TAX REVENUE
2 1 Use of Funds. For and in consideration 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 adverttsmg and conducting sohcltat~ons and promotxonal programs to attract
tourists and convention delegates or registrants to the municipality or its v~clmty as authorized by
TEx T,~ CODE §351 101(a) Funds for any calendar year which are unused by mldmght December
31"t of that year shall be refunded to CITY wlthtn tinrty (30) days
2.2 Adm!nlstrative Costs. The hotel tax funds received from the CITY by the ASSOCIATION
may be went for day-to-day operations, supplies, salaries, office rental, travel expenses, and other
admlmstratlve costs that are recurred (hrectly in the performance by the ASSOCIATION of those
act~mt~es specified m ¶2 1 above and are allowed by TEx TAX CODE §351 101 (f)
2 3 Specific Restrictions on Use of Funds.
(a) That po~on of total adnnmstrative costs of the ASSOCIATION for wluch hotel tax
funds may be used shall not exceed that pomon of the ASSOCIATION's admunstratlve costs
actually recurred m conducting the act~wt~es specified m ¶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 winch is not d~rectly related to the promotion of local tourism and
the convention and hotel lndustt3' or the performance of the person's job in an effiment and
professional manner
HI. RECORDKEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
(a) The ASSOCIATION shall prepare and submit to the City Manager of the CITY an
annual bridget (see Exinint "A") as approved by the City Council for each calendar year, for such
operations of the ASSOCIATION m wtuch the hotel tax funds shall be used by the
ASSOCIATION Tins budget shall specifically identify proposed expenditures of hotel tax funds
by the ASSOCIATION In other words, the CITY should be able to audit specffically where the
funds m the separate account relating to hotel tax funds will be expended The CITY shall not pay
to the ASSOCIATION any hotel tax revenues as set forth in Section I of tins contract dunng any
fiscal year of flus Agreement unless a budget for such respective fiscal year has been approved in
wntmg by the Denton C~ty Council authonzmg the expenditure of funds Fmlure to subnnt an
annual budget may be considered a breach of contract, and if not remedied is considered grounds for
termination of tins Agreement as stated m paragraph 4 2
Page 3
(b) The ASSOCIATION acknowledges that the approval of such budget by the Denton
City Council creates a fiduciary duty m the ASSOCIATION w~th respect to the hotel tax funds prod
by the CITY to the ASSOCIATION under th~s Agreement The ASSOCIATION shall expend
hotel tax funds only m the manner and for the purposes spemfied m ttus Agreement, TEX T^x
CODE §351 101(a) and m the budget as approved by the CITY
3.2 Separate Accounts. The ASSOCIATION shall maintain any hotel tax funds prod to the
ASSOCIATION by the CITY ~n a separate bank account w~th segregated accounting, such that any
reasonable person can rewew the source of expenditures of tax fimds A bank reconcthat~on report
(see Exhibit '~B") ~s required w~th each quarterly report
3 3 Financial Records. The ASSOCIATION shall mmntmn complete and accurate financial
records of each expendature of the hotel tax funds made by the ASSOCIATION These funds are
reqmred to be claasffied as restricted funds for and~ted financial purposes, and may not be used for
supportmg servmes, ~ncludlng, but not lma~ted to, auchtmg fees and attorney's fees Upon
reasonably advance written request of the Denton City Cotmc~l, the C~ty Manager or designate, or
any other person, shall make such financial records avmlable for ~nspect~on and rewew by the party
makang the request ASSOCIATION understands and accepts that all such finanmal records, and
any other records relatmg to fins Agreement shall be subject to the Pubhc Information Act, T~x
GOV'T CODE, ch 552, as hereafter mended
3.4 Quarterly Reports After unreal receipt of hotel tax funds, and w~thtn thirty days after the
end of every quarter thereafter, untal all funds have been expended and reported to the CITY,
ASSOCIATION shall furnish to CITY (1) a performance report of the work performed under ttus
Agreement deacnbmg the act~wtles performed pursuant to ttus Agreement dunng that contract
quarter, (2) a hst of the expenditures made w~th regard to hotel tax funds pursuant to TEX TAx
CODE §351 101(c), and (3) a copy of all financial records (e g, receipts, ~nvmces, bank statements,
and other relevant documentataon) Both the performance and expenditure reports will be m a form
e~ther determmed or approved by the C~ty Manager or designate (see Extub~t "B") The
ASSOCIATION shall respond promptly to any request from the City Manager of the CITY, or
designate, for add~tlonal mformat~on relating to the act~wt~es performed under fins Agreement
3.5 Notice of Meetings The ASSOCIATION shall g~ve the C~ty Manager of the CITY
reasonable advance written notice of the tune and place of all meetings of ASSOCIATION's Board
of Dtrectors, as well as any other meeting of any constituency of the ASSOCIATION at wbach thts
Agreement or any matter the subj act of thas Agreement shall be considered Thts provision shall not
be deemed to require the ASSOCIATION to g~ve notme of any executive session of the Executive
Cormmttee of the ASSOCIATION
IV. TERM AND TERMINATION
4 1 Term. The term of this Agreement shall commence on January 1, 2001 and terminate at
m~dmght on December 31, 2001 Tlus term shall be a period of one year
Page 4
4.2 Termination Without Cause.
(a) Ttus Agreement may be terminated by either party, with or without cause, by g~xang
the other party sixty (60) days advance written not, ce
(b) In the event thas contract as termmated by eather party pursuant to Sectaon 4 2(a),
the CITY agrees to reamburse the ASSOCIATION for any contractual obllgataons of the
ASSOCIATION undertaken by the ASSOCIATION an satasfactory performance of those
actiwtles specified m ¶¶2 1 and 2 2 above and that were approved by the Council through the
budget, as noted an ¶3 1 Th~s reambursement is condataoned upon such contractual obhgataons
havang 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 obhgataons
hawng a term not exceeding the full term of this Agreement Notwathstandang any provision
hereof to the contrary, the obhgataon of the CITY to reimburse the ASSOCIATION or to assume
the performance of any contractual obhgatlons of the ASSOCIATION for or under any contract
entered into by the ASSOCIATION as contemplated here~n shall not exceed 66 2/3% of the
current quarterly payment
(c) Further, upon termmataon pursuant to ¶4 2(a), the ASSOCIATION wall provade the
CITY 1)~ Wathm 10 business days from the termination notlfieataon, a short-term budget of
probable expenditures for the remaining 60 day period between termination not~ficataon and
contract termmataon Thas budget will be presented to Council for approval wathln 10 business
days after reeeapt by CITY If formal approval is not given within 10 busaness days and the
budget does not contain any expenditures that would be prohab~ted by the Texas Tax Code, and
as wathm the current contractual period approved budget, the budget will be eonsadered
approved,. 2) Watlun 30 days, a full accountang of all expendatures not prevaously anthted by the
City, 3) Wathm 5 busmess days of a request from the CITY, a hstmg of expendatures that have
occurred since the last required reporting period, 4) a final accountmg of all expendatures and tax
funds on ~the day of termmataon The ASSOCIATION wall be obhgated to return any unused
funds or i funds determined to be used improperly Any use of rematmng funds by the
ASSOCIATION after notaficataon of termanataon IS conditioned upon such contractual
obhgataons having been ancurred and entered into an the good faith performance of those services
contemplated m 2 1 and 2 2 above, and further conditioned upon such contractual obllgataons
having a term not exceeding the full term of this Agreement
4 3 AUtomatic Termination. Tbas Agreement shall automatically termanate upon the
occurrence of any of the following events
(a) The t~rmmatlon of the legal exastence of the ASSOCIATION,
(b) The insolvency of the ASSOCIATION. the filing of a petition an bankruptcy, eather
voluntarily or mvoluntanly, or an assignment by the ASSOCIATION for the benefit of
crexhtors,
(e) The continuataon of a breach of any of the terms or condations of this Agreement by
eather the CITY or the ASSOCIATION for more than tharty (30) days at, er written notace of
such breach as g~ven to the breaehang party by the other party, or
Page 5
(d) The fmlure of the ASSOCIATION to subunt a financml quarterly report which comphes
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 Notw~thstanchng any other
prowslonof tins Agreement, to m~t~gate damages and to preserve evidence and ~ssues for jmhmal
determmataon, either party shall have the right to terminate th~s Agreement upon munethate not~ee
to the other party m the event that any person has mst~mted lmgat~on concermng the actlwt~es of the
non-tenmnatmg party, and the tenmnatmg party reasonably believes that such activities are required
or prohibited under tins Agreement
4.5 In the event that tlus 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
~mproperly, w~tinn 30 days after termination of tins Agreement
V. GENERAL PROVISIONS
5.1 Snbeontraet for Performance of Services Nothing ~n this Agreement shall pmInbat, nor
be construed to pmInb~t, the agreement by the ASSOCIATION w~th another private entity, person,
or orgamzat~on for the performance of those sermces described in ¶2 1 above In the event that the
ASSOCIATION enters rote any arrangement, contractual or otherwise, with such other entity,
person or organlzatton, the ASSOCIATION shall cause such other entity, person, or orgamzat~on to
adhere to, conform to, and be subJeCt to all prowslons, terms, and conditions of tins Agreement and
to TEx Tax Corm ch 351, including repo~ng reqmrements, separate funds mtuntenance, and
hmltataon$ and prohlbltxons pertaining to expenditure of the agreed payments and hotel tax funds
5 2 Independent Contractor. The ASSOCIATION shall operate as an independent 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 ~ts operations and
performance of services hereunder, and such persons, entlt~es, or orgamzat~ons performing the same
and the ASSOCIATION shall be solely responsible for the acts and onnss~ons of ~ts d~rectors,
officers, employees, agents, and subcontractors The ASSOCIATION shall not be considered a
partner or joint venturer w~th the CITY, nor shall the ASSOCIATION be considered nor ~n any
manner hold atselfout as an agent or officml representative of the CITY
5.3 Indemnification 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, IN WHOLE OR IN PART, UPON ALLEGATIONS OF
NEGLIGENT OR INTENTIONAL ACTS OF ASSOCIATION, ITS OFFICERS,
EMPLOYEES, AGENTS, SUBCONTRACTORS, LICENSEES AND INVITEES
Page 6
5.4 AsSignment. The ASSOCIATION shall not assign flus Agreement without first obtamang
the wntterl consent of the CITY
5.5 Notice. Any notice reqtured to be g~ven under flus Agreement or any statute, ordinance, or
regulation, shall be effective when g~ven an wnt~ng and deposned m the Umted States mml, cemfied
mai1, return receipt requested, or by hand-dehvery, addressed to the respectave part, es as follows
CITY ASSOCIATION
Caty Manager Yvonne Jenkins
City of Denton Denton Hohday Festival Foundation, Inc
215 E MeKmney P O Box 2765
Denton, TX 76201 Denton, Texas 76202-2765
5.6 Int~rement. Tbas Agreement and each prowsmn hereof, and each and every right, duty,
obhgation~ and habthty set forth hereto shall be bmchng upon and inure to the benefit and obhgatmn
of the CITY and the ASSOCIATION and their respective successors and assagns
5 7 Al~plieation of Laws. All terms, condmons, and prows~ons of this Agreement are subject
to all apphcable federal laws, state laws, the Charter of the Caty of Denton, all ordinances passed
pursuant thereto, and all judicial detemunataons relatave thereto
5 8 EXclusive Agreement. Tbas Agreement contmns the entire understanding and constitutes
the entire[ agreement between the pames hereto eoneermng the subject matter eontmned here~n
There are ,no representations, agreements, arrangements, or tmderstand~ngs, oral or written, express
or ~mplleO, between or among the part, es hereto, relatang to the subject matter of flus Agreement,
wluch are not fully expressed hereto The terms and condataons of this Agreement shall prevml
notwithstanding any variance m tins Agreement from the terms and cond~taons of any other
document' relating to flus transaetaon or these transaeUons
5 9 D~lplleate Originals Tlus Agreement as executed an dupheate originals
5.10 H~aflings. The headings and subheadangs of the various sections and paragraphs of flus
Agreemeat are inserted merely for the purpose of convemence and do not express or unply any
hm~tation~ defimt~on, or extension of the specific terms of the section and paragraph so designated
5.11 Severabfilty. If any sectaon, subsection, paragraph, sentence, clause, phrase or word m tins
Agreement, or apphcation thereof to any person or c~rcumstance as held anvahd by any court of
competent junschetion, such holding shall not affect the vahd~ty of the remmumg pomons of flus
Agreeme~t, and the part,es hereby declare they would have enacted such remalmng portions despite
any such inval~chty
Page 7
EXECUTED thru ~- ~day of ~ ~f&,~?~ ~f"- ,2000
THE CITY OF DENTON, TEXAS
EULINE BROCK, MAYOR
ATTEST
By
L
CITY ATTORNEY
DENTON FESTIVAL
A', INC
ATTEST
By ~_~(~)~ By ~
Secretary
Page 8
Exhibit A
DENTON HOLIDAY FESTIVAL
BUDGETPROPOSAL
PROGRAM YEAR2001
REQUESTED
PROGRAM/ACTIVITY AMOUNT
ADVERTISING
Newspaper Hohday L~ght~ng Events 2,500
Brochures Hohday L~ght~ng Events 500
Advert~sin~ ~ostcards,Mu~ls,Sweatsh~rts 1,000
$ 4,000
ART
L~ghbng Maintenance Year round CHOS Trees 1,500
Artists Brave Combo annual concert 2,000
$ 3,500
TOTAL $ 7,500
Exhibit B
DENTON HOLIDAY FESTIVAL ASSOCIATION
FINANCIAL REPORT
Program Year 2001
IST 2ND 3RD 4TH YEAR BUDGET
QUARTER QUARTER QUARTER QUARTER to vs
DATE ACTUAL
$o $o $o $o $o $o
$0 $0 $0 $0 $0 $7,500
0 0 0 0 0 0
$0 $0 $0 $0 $0 $7,500
$0 $0 $0 $0 $0 $2,500
0 0 0 0 0 0
0 0 0 0 0 500
$o $o $o $o $o $4,ooo
$o $0 $0 $0 $0 $1,500
0 0 0 0 0 2,000
$0 $0 $0 $0 $0 $3,500
$0 $0 $0 $0 $0 $7,500
$o $o $o $o $o $o
$o $o $o $o $o $o
$o $o $o $o $o $o
0 0 0 0 0 0
0 0 0 0 0 0
$o $o $o $o
$o $o $o $o $o
Date Submitted Program Director