Loading...
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