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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