2000-305 0RD1NANCB NO ~ -~0~-
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND THE TEJAS STORYTELLING ASSOCIATION,
INC, FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND PROVIDING AN
EFFECTIVE DATE
THE COIYNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SBCTION I That the Mayor is hereby anthonzed to execute an agreement between the
C~ty of Denton and the Tejas Storytelhng Assoemnon, Inc for the payment and use of hotel tax
revenue, under the terms and conditions eontmned ~n the agreement, a copy of which m attached
hereto and made a part hereof
SBCTION II That thru ordanance shall become effective ~mmedmtely upon ~ts passage
and approval
PASSED D PROVEDth sthe dayof ,2ooo
EUL1NE BROCK, MAYOR
ATTESTs
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO ~
AGREEMENT BETWEEN THE CITY OF DENTON AND
TEJAS STORYTELLING ASSOCIATION, INC (CY2001)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a mummpal corporation
(the "CITY"), and the TeJas Storytellmg Assoclataon, Inc, a legal entity mcorporated under the laws
of the State of Texas (the "ASSOCIATION")
WHEREAS, TEx T^x CODS §351 002 authorizes the CITY to levy by ordinance a
mumclpal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the consideration
paid by a hotel occupant, and
WHEREAS, by ordinance, the CITY has provided for the assessment and collectaon of a
municipal hotel occupancy tax m the City of Denton of seven percent (7%), and
WHEREAS, T~x T^x COD~ §351 101(a) authorizes the CITY to use revenue from its
munlcapal hotel occupancy tax to promote tourism and the convention and hotel industry by
advertising and conducting solicitations and promotional programs to attract tounsts and convention
delegates or regastrants to the munlclpahty or its VlClmty, and
WHEREAS, the ASSOCIATION is well equipped to perform those activities, and
WHEREAS, Tex T^x CoDe §351 101(c) authorizes the CITY to delegate by contract with
the ASSOCIATION, as an mdependent entity, the management and supervision of programs and
activities of the type described heremabove funded with revenue from the mummpal hotel
occupancy tax,
NOW, THEREFORE, in conmderat~on of the performance of the mutual covenants and
promises contained hereto, the CITY and the ASSOCIATION agree and contract as follows
I HOTEL TAX REVENUE PAYMENT
1 I Consideration. For and m eonsiderat~on of the actlwt~es to be performed by the
ASSOCIATION under flus Agreement, the CITY agrees to pay to the ASSOCIATION a portion 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 sometimes herein referred to as the "agreed
payments" or "hotel tax funds")
1.2 Amount of Payments.
(a) As used in flus Agreement, the following terms shall have the following specific
meanings
(0 The term "hotel tax revenue" shall mean the gross monies collected and
recmved by the City as mumclpal hotel occupancy tax at the rate of seven percent (7%) of
the price prod for a room in a hotel, pursuant to Texas Tax Code 351 002 and City
Ordmance Hotel tax revenue will include penalty and interest related to the late
payments of the tax revenue by the taxpayer
00 The term "Collection penod" will mean the collection period for the CITY's
fisgal year It will 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
(n0 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 t~me (t e,
fis9al year or fiscal quarter), less (1) attorney and auditing costs ~ncurred dunng such
relevant period of tune for costs of collection or auditing of hotel taxpayers Attorney and
auditing costs include fees paid to attorneys or agents not m the regular employ of the CITY
for which attorneys or agents effect enmphance or collection of the hotel tax fxom taxpayers,
and (2) enurt costs and other expenses recurred in litigation against or auditing of such
taxpayers
(~v) The term "contract quarter' shall refer to any quarter of the calendar year m
which tbas Agreement ~s m force Contract quarters will 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 in th~s Agreement
and all attachments hereto, the CITY shall pay to ASSOCIATION an amount of money in each
contract year equal to the lesser amount of F~ve and Twelve One Hundredths percent (5 12%) of
the annual base payment amount or the fixed contract amount of F~fiy-F~ve Thousand Dollars
($55,000), Tins amount will be dxwded 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 estimated for the fiscal year The fourth quarterly
payment Will represent 25% of the fixed contract amount or the unpaid remainder of 5 12% of
the base ~aymont amount, whichever ~s less Each quarterly payment ~s subject to receipt of
unused funds from the prior contract period and the receipt of the required 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 speezfied m ¶1 2, above, as determined by the hotel tax revenue
collected
(b) Each quarterly payment shall be paid upon receipt of the required reports and after the
25th day following the last day of the contract quarter If quarterly financxal and performance
reports are not received within thirty (30) days of the end of the apphcable contract quarter, the
recipient may be held m breach of tbas Agreement The CITY may withhold the quarterly
payment(~) unUl the appropriate reports are received and approved, which approval shall not
unreasonably be w~thheld
Page 2
1.4 Other hmitations regarding consideration
(a) The funding of flus project m no way commits the CITY to future funding of tbas
program beyond the current contract period Any future funding ~s solely the responslblhty of the
ASSOCIATION
Co) It ~s expressly understood that flus contract ~n no way obligates the General Fund or any
other momes or erechts of the CITY
(c) CITY may withhold further allocations ff CITY deterunnes that ASSOCIATION's
expendxtures deviate materially from their approved budget
II. USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and ~n cons~derataon 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 advertising and conducting sohc~tatlons and promotional programs to attract
tourists and conventaon delegates or registrants to the mumclpahty or ~ts v~clmty as authorized by
TEX TAX CODE §351 101(a) Funds for any calendar year which are unused by mldmght December
31st of that year shall be refunded to CITY w~thm thirty (30) days
2 2 Administrative Costs. The hotel tax funds received from the CITY by the ASSOCIATION
may be spent for day-to-day operatmns, supphes, salaries, office rental, travel expenses, and other
admunstrat~ve costs that are incurred d~reefly in the performance by the ASSOCIATION of those
act~wtles Specified ~n ¶2 1 above and are allowed by TEX TAX CODE §351 101(f)
2 3 Specific Restrictions on Use of Funds.
(a) That pomon of total adunmstratlve costs of the ASSOCIATION for wluch hotel tax
funds may be used shall not exceed that portion of thc ASSOCIATION's admunstratlve costs
actually recurred in conducting the actlwt~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 which is not chrectly related to the promotion of local tourism and
the convention and hotel industry or the performance of the person's job m an efficient and
professional manner
HI. RECORDKEEPING AND REPORTING REQUIREMENTS
3 1 Budget.
(a) The ASSOCIATION shall prepare and submxt to the C~ty Manager of the CITY an
annual budget (see Exlublt "A") as approved by the City Council for each calendar year, for such
operatmns of the ASSOCIATION m whtch the hotel tax funds shall be used by the
ASSOCIATION Tlus budget shall specifically identify proposed expenditures of hotel tax funds
by the ASSOCIATION In other words, the CITY should be able to aucht specifically where the
funds m the separate account relating to hotel tax funds wdl be expended The CITY shall not pay
to the ASSOCIATION any hotel tax revenues as set forth ~n Section I of th~s contract during any
Page 3
fiscal year of thts Agreement unless a budget for such respective fiscal year has been approved m
writing by the Denton City Council anthonzmg the expenditure of funds Fmlure to submit an
annual budget may be considered a breach of contract, and if not remedied is considered grounds for
term~nataon of tlms Agreement as stated m paragraph 4 2
(b) The ASSOCIATION acknowledges that the approval of such budget by the Denton
City Cotmctl creates a fidumary duty m the ASSOCIATION w~th respect to the hotel tax funds pa~d
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 specified in tlus 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 pard to the
ASSOCIATION by the CITY m a separate bank account w~th segregated accountang, such that any
reasonable person can remew the source of expenditures of tax fimds A bank reconciliation report
(see Exl~b~t "B") ~s reqmred w~th each quarterly report
3.3 Fil~anelal Records. The ASSOCIATION shall mamtmn complete and accurate financial
records of each expendature of the hotel tax funds made by the ASSOCIATION These funds are
reqmred to be classified as resmcted funds for audited financml purposes, and may not be used for
supporting servaces, including, but not lamted to, auchtmg fees and attorney's fees Upon
reasonably advance written request of the Denton City Council, the City Manager or designate, or
any other person, shall make such financial records avmlable for ~nspectaon and review by the party
making the request ASSOCIATION understands and accepts that all such financial records, and
any other records relating to tlus Agreement shall be subject to the Pubhc Information Act, TBx
GOV'T CODE, eh 552, as hereafter emended
3 4 QtaarterlyReports. W~th~n tlurty days after the end of every contract quarter,
ASSOCIATION shall furnish to CITY (1) a performance report of the work performed under tins
Agreement describing the actavltaes performed pursuant to tlus Agreement during that contract
quarter, (2) a hst of the expenditures made with regard to hotel tax funds pursuant to TBx T^x
CODE §351 101(c), and (3) a copy of all financial records (e g, recmpts, ~nvmces, bank statements,
and other relevant docamentataon) Both the performance and expenditure reports w~ll be an a form
either determined or approved by the City 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~taonal mformat~on relating to the actavmes performed under this Agreement
3 5 Not~ee of Meetings The ASSOCIATION shall g~ve the City Manager of the CITY
reasonable advance written notate of the tame and place of all meetings of ASSOCIATION's Board
of D~rectors, as well as any other meeting of any constamency of the ASSOCIATION at which th~s
Agreement or any matter the subject of th~s Agreement shall be considered Tins provision shall not
be deemed to reqmre the ASSOCIATION to give notace of any executive session of the Executave
Commattee of the ASSOCIATION
IV TERM AND TERMINATION
4.1 Term. The term of ttus Agreement shall commence on January 1, 2001 and terminate at
m~dmght on December 31, 2001 This term shall be a period of one year
Page 4
4.2 Termination Without Cause.
(a) Tins Agreement may be terminated by either party, with or without cause, by giwng
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 obligations of the
ASSOCIATION undertaken by the ASSOCIATION in satisfactory performance of those
activities specified in ¶¶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 recurred 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 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 herein shall not exceed 66 2/3% of the
current quarterly payment
(c) Further, upon tenmnatIon pursuant to ¶4 2(a), the ASSOCIATION will provide the
CITY 1) Within l0 business days from the termination notification, a short-term budget of
probable expenditures for the remmnmg 60 day period between termination notification and
contract termination Th~s budget will be presented to Council for approval w~thm l0 business
days after receipt by CITY If formal approval xs not given witinn l0 business days and the
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) Within 30 days, a full accountmg of all expenditures not previously audited by the
City, 3) Within 5 business days of a request from the CITY, a hstxng of expenditures that have
occurred smce the last reqmred reporting period, 4) a final accounting of all expenditures and tax
funds on ithe day of termination The ASSOCIATION will be obligated to return any unused
funds or, funds determined to be used improperly Any use of remalmng funds by the
ASSOCIATION after notification of termination is conditioned upon such contractual
obhgatxons hawng been recurred and entered into ~n the good faith performance of those services
contemplated m 2 1 and 2 2 above, and further condmoned upon such contractual obhgatxons
having a term not exceeding the full term of this Agreement
4 3 Automatic Termination Tins Agreement shall automatically termmate upon the
occurrence of any of the following events
(a) The ternunat~on of the legal existence of the ASSOCIATION,
(b) The InSolvency of the ASSOCIATION, the filing of a petition ~n bankruptcy, either
voluntarily or xnvoluntanly, or an assignment by the ASSOCIATION for the benefit of
crechtors,
Page 5
(c) The contmualaon of a breach of any of the terms or conditions of this Agreement by
el~er the CITY or the ASSOCIATION for more than tlurty (30) days after written notice of
such breach is gtven to the breaching party by the other party, or
(d) The fmlure of the ASSOCIATION to submit a financial quarterly report winch compiles
w~th the reporting procedures required hereto and generally accepted accounting pnnclples
prior to the beginning 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 provision
of,tins Agreement, to m~tlgate damages and to preserve evidence and ~ssues for jud~cml
determination, either party shall have the right to terminate this Agreement upon ammedlate
notice to the other party m the event that any person has instituted httgataon concermng the
act~mt~es of the non-terminating party, and the terminating party reasonably beheves that
such act~mtles are reqmred or pminb~ted under this 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, w~thm 30 days after termination of tins Agreement
V. GENERAL PROVISIONS
5.1 Subcontract for Performance of Services. Nothing in this Agreement shall proinint, nor
be construed to pminblt, the agreement by the ASSOCIATION with another private entity, person,
or organ~atton for the performance of those services described in ¶2 1 above In the event that the
ASSOCIATION enters into any arrangement, contractual or othenvise, with such other entity,
person or brgamzataon, the ASSOCIATION shall cause such other entity, person, or orgamzat~on to
adhere to,,confonn to, and be subject to all pmvls~ons, terms, and conditions of tins Agreement and
to T~x TAX CODg ch 351, including reporting requirements, separate funds maintenance, and
llrmtataons and pminint~ons pertmmg 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 ~ervmes 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 operataons and
performance of sermces hereunder, and such persons, entitles, or orgamzat~ons performing the same
and the ASSOCIATION shall be solely responsible for the acts and omissions of its &rectors,
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 m any
manner hold ~tself out as an agent or officml representative of the CITY
5.3 I~demnifleatmn. THE ASSOCIATION AGREES TO INDEMNIFY, HOLD
HARMLESS, AND DEFEND THE CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES
FROM 3~ND 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
Page 6
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.
5.4 Assignment, The ASSOCIATION shall not assign this Agreement without first obtaining
the written consent of the CITY
$.$ Notice. Any notme required to be given under this Agreement or any statute, ordinance, or
regnlation, shall be effective when given in writing and deposited m the Umted States mml, cemfied
marl, return receipt requested, or by hand-dehvery, addressed to the respective parhes as follows
CITY ASSOCIATION
C~ty Manager Tejas Storytelhng Association, Inc
City of Denton Karen Morgan
215 E McKumey P O Box 2806
Denton, TX 76201 Denton, Texas 76202-2806
5 6 Inurement. Tlus Agreement and each provision hereof, and each and every right, duty,
obhgation, and liability set forth herein shall be binding upon and inure to the benefit and obhgation
of the CITY and the ASSOCIATION 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 City of Denton, all or&nantes passed
pursuant thereto, and all judmlal determinations relative thereto
5.8 Exehisive Agreement. Tbas Agreement contains the en~e understanding and constitutes
the enttre agreement between the part, as hereto concerning the subject matter contained herein
There are,no representations, agreements, arrangements, or understandings, oral or written, express
or lmphed, between or among the parties hereto, relating to the subject matter of tlus Agreement,
wbach are not fully expressed herein The terms and conchtlons of this Agreement shall prevail
notwithstanding any variance in this Agreement from the terms and conditions of any other
document relating to this transaction or these transactions
5 9 Duplicate Originals. This Agreement is executed in duplicate originals
5.10 Headings. The headings and subheadings of the various sections and paragraphs of tins
Agreement are inserted merely for the purpose of convemence and do not express or maply any
llnutatlon, defimtlon, or extension of the specific terms of the section and paragraph so designated
5.11 Severablllty If any section, subsection, paragraph, sentence, clause, phrase or word m tlus
Agreement, or apphcation thereof to any person or cimumstance is held invalid by any court of
competent junsdmtion, such holding shall not affect the validity of the remaining po~ons of tbas
Agreement, and the partaes hereby declare they would have enacted such remalmng pomons despite
any such tnvall&ty
Page 7
5.12 Insurance The ASSOCIATION shall provide ~nsurance as follows
1 $500,000 Commercial General Llabthty, or $1,000,000 Event Insurance, covenng
all events taking place on C~ty-owned property
2 Statutory Workers' Compensation and Employers' Llab~hty
($100,000/$500,000/$100,000)
The CITY must be named as an adchlaonal insured on all pohc~es (except Workers' Compensation)
and proof of coverage shall be submitted prior to any payment by the CITY
EXECUTED this ~ day of C,~./')~-~./~f~~' ,2000
THE CITY OF DENTON, TEXAS
By
EUL1NE BROCK, MAYOR
ATTEST . AP~~
~CITY SECRETARY ~ CITY ATTORNE~
~RY~LLING ASSOCIATION,
ATTEST APPROVED AS TO LEGAL FORM
By By
Secretary
Page 8
Exhibit A
TEJAS STORYTELLING ASSOCIATION
for the
TEXAS STORYTELLING FESTIVAL
Budget PrOposal for Program Year 2001
Requested
ProgramlAcflv,ty Amount
Advertls,ng Texas Storytelling Festival
Newspapers, tv, and magaz,nes $ 8,000
Flyers, posters, and brochures 7,000
Other pnnted communication newsletters 2,000
Marketing and Promotion 7,000
Ma~hng hst pumhases 1,000
Mailing costs 3,000
V~deo and stJII photography 2,000
$ 30,000
Texas Storytelhng Festival -
Art Performance Fees
Salanes
-Office Staff $ 2,000
Office Supplies and Phone 1,200
Office Rental 320
S)te Opembons Expenses
i -Tent, chair, and stage rentals 4,000
-Sound Equipment 400
Food and Lodging 1,000
Honona 440
$ 9,360
HIstorical Texas Storytelling Festival
Concerts $ 800
Workshops 800
Salanes
-Office ~Staff 3,000
Office Supplies and Phone 1,800
Office Rental 480
Site Operations Expenses
-Tent, chair, and stage rentals 6,000
-SoUnd Equipment 600
Food and Lodging 1,500
Honona 660
$ 15,640
Total $ 55,000
TEJAS STORYTELLING ASSOCIATION
FINANCIAL REPORT
Program Year 2001 Exhibit B
1ST 2ND 3RD 4TH YEAR BUDGET
QUARTER QUARTER QUARTER QUARTER to vs
DATE ACTUAL
$o $o $o $o $o $o
$0 $0 $0 $0 $0 $55,000
0 0 0 0 0 0
$0 $0 $0 $0 $0 $55,000
$0 $0 $0 $0 $0 $8,ooo
0 0 0 0 0 7,000
0 0 0 0 0 7,000
0 0 0 0 0 2,000
0 0 0 0 0 1,000
0 0 0 0 0 3,000
0 0 0 0 0 2,000
0 0 0 0 0 500
$0 $0 $0 $0 $0 $30,500
$0 $0 $0 $0 $0 $2,000
0 0 0 0 0 1,200
0 0 0 0 0 320
0 0 0 0 0 4,000
0 0 0 0 0 400
0 0 0 0 0 1,000
0 0 0 0 0 440
, $0 $0 $0 $0 $0 $9,360
$o $o $o $o $o $8oo
0 0 0 0 0 800
0 0 0 0 0 3,000
0 0 0 0 0 1,800
0 0 0 0 0 480
0 0 0 0 0 0
0 0 0 0 0 6,000
0 0 0 0 0 600
0 0 0 0 0 1,500
0 0 0 0 0 660
$0 $0 $0 $0 $0 $15,640
$0 $0 $0 $0 $0 $55,500
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
15T 2ND 3RD 4TH YEAR BUDGET
QUARTER QUARTER QUARTER QUARTER to vs
(JAN.MA~ ~PR~JU~ ~UL-$E~ (OCT-DE~ DATE Exh~b~QTUAL
$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 $o $o $o
Date Submitted Program Director