2000-306 ORDINANCE NO
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT
BETWEE~ THE CITY OF DENTON AND THE DENTON BLACK CHAMBER OF
COMMERCE FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND
PROVIDING AN EFFECTIVE DATE
THE COLrNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the Mayor is hereby authorized to execute an agreement between the
City of D~nton and the Denton Black Chamber of Commerce for the payment and use of hotel
tax revenue, under the terms and conditions contmned m the agreement, a copy of which is
attached hereto and made a part hereof
SI~CTION II That this ordinance shall become effective immediately upon its passage
and approval
PASSED AND APPROVED this the -~'~'-~ day of (~/jO~/Tg~J~' ,2000
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROEED AS TO LEGA~
AGREEMENT BETWEEN THE CITY OF DENTON AND
THE DENTON BLACK CHAMBER OF COMMERCE (CY2001)
PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE
THIS AGREEMENT made between the City of Denton, Texas, a mumc~pal corporataon
(the "CITY"), and the Denton Black Chamber of Commerce, a legal entity ex~st~ng under the laws
of the State of Texas (the "CHAMBER")
WHEREAS, Tax TAX CODE §351 002 authorizes the CITY to levy by ordinance a
mume~pal hotel occupancy tax ("hotel tax") not exceedang seven percent (7%) of the conslderat~on
pa~d by a hotel occupant, and
WHEREAS, by ordinance, the CITY has prowded for the assessment and colleetaon of a
mumclpal hotel occupancy tax ~n the City of Denton of seven percent (7%), and
WHEREAS, TEx TAX CODE §351 101(a) authorizes the CITY to use revenue fi:om ~ts
mtunc~pal hotel occupancy tax to promote tourism and the convention and hotel ~ndustry by
advertising and conducting sohcltat~ons and promotional programs to attract tourists and convention
delegates or registrants to the mun~clpahty or its wcunty, and
WHEREAS, the CHAMBER is well equipped to perform those act~wt~es, and
WHEREAS, TEx TAX CODE §351 101(c) authorizes the CITY to delegate by contract with
the CHAMBER, as an independent entaty, the management and supervision of programs and
actlxqtles of the type described heremabove funded with revenue fi:om the municipal hotel
occupancy tax,
NOW, THEREFORE, in consideration of the performance of the mutual covenants and
promises contained herein, the CITY and the CHAMBER agree and contract as follows
I HOTEL TAX REVENUE PAYMENT
1 I Consideration. For and m consideration of the actlxntles to be performed by the
CHAMBER under tl~s Agreement, the CITY agrees to pay to the CHAMBER 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 CHAMBER someUmes herein 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 followmg specific
meamngs:
0) The term "hotel tax revenue" shall mean the gross monies collected and
received by the City as municipal hotel occupancy tax at the rate of seven percent (7%) of
the pnee prod for a room in a hotel, pursuant to Texas Tax Code 351 002 and City
Ordmance Hotel tax revenue will include penalty and ~nterest related to the late
payments of the tax revenue by the taxpayer
01) The term "Collection penod" will mean the collection period for the CITY's
fiscal 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
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 time (t e,
fiscal year or fiscal quarter), less (1) attorney and audatlng costs meurred dunng such
relevant period of tame for costs of collectaon or audattng of hotel taxpayers Attorney and
auditing costs include fees paid to attorneys or agents not m the regular employ of the CITY
for wlueh attorneys or agents effect comphanee or collection of the hotel tax from taxpayers,
and (2) court costs and other expenses recurred m lmgataon agtunst or auditing of such
taxpayers
0v) The term "contract quarter" shall refer to any quarter of the calendar year m
wbach th~s Agreement ~s in force Contract quarters will end on March 31st, June 30t~,
September 30t~, and December 31st of each contract year
(b) In return for satisfactory performance of the activities set forth ~n thas Agreement
and all attachments hereto, the CITY shall pay to CHAMBER an amount of money ~n each
contract year equal to the lesser amount of One and Thirty One Hundreths percent (1 30%) of
the annual base payment amount or the fixed contract amount of Fourteen Thousand Dollars
($14,000) Thas amount wall be d~vlded into quarterly payments equal to 25% of the annual fixed
contract amount, unless the City can show with reasonable certainty that the annual base
payment amount wall be less than originally estimated for the fiscal year The fourth quarterly
payment wall represent 25% of the fixed contract amount or the unpaid remainder of 1 30% of
the base payment amount, whichever is less Each quarterly 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 "quarterly payments" shall mean payments by the CITY to the BUREAU
of those amounts specified ~n ¶1 2, above, as determined by the hotel tax revenue collected
(b) th Each quarterly payment shall be paid upon receapt of the required reports and
after the 25 day following the last day of the contract quarter If quarterly £mancaal and
performar~ee reports are not received within ~rty (30) days of the end of the apphcable contract
quarter, the rec~paent may be held m breach of flus Agreement The CITY may wathhold the
quarterly payment(s) until the appropriate reports are received and approved, wbach approval shall
not unreasonably be w~thheld
P~e2
1.4 Other limitations regarding consideration.
(a) The funding of flus project m no way commits the CITY to future funding of tins
program beyond the current contract period Any future funding ~s solely the responszbalaty of the
CHAMBER
Co) It as expressly understood that tins contract m no way obligates the General Fund or
any other momes or credats of the CITY
(c) CITY may withhold further allocations if CITY determines that CHAMBER's
expend~turas dewate materially t~om their approved budget
II USE OF HOTEL TAX REVENUE
2.1 Use of Funds. For and ~n consaderatmn of the payment by the CITY to the CHAMBER of
the agreed payments of hotel tax funds specified above, the CHAMBER agrees to use such hotel tax
funds only for advertasmg and conducting sohc~tat~ons and promotional programs to attract tourists
and conventaon delegates or registrants to the mumcapalaty or ars VlCunty as authorized by TEx TAx
CooE §351 101(a) Funds for any calendar year winch are unused by m~dmght December 31sC of
that year shall be refunded to CITY watinn tinrty (30) days
2.2 Administrative Costs The hotel tax funds receaved from the CITY by the CHAMBER
may be spent for day-to-day operations, supphes, salanes, office rental, travel expenses, and other
adm~mstrat~ve costs that are recurred darectly an the performance by the CHAMBER of those
aet~wtaes Specafied m ¶2 1 above and are allowed by Tex TAX Co~)s §351 101(0
2.3 Specific Restrictions on Use of Funds
(a) That po~on of total adrmmstrat~ve costs of the CHAMBER for winch hotel tax funds
may be used shall not exceed that port,on of the CHAMBER's admmastrat~ve costs actually
ancurred an conducting the act~vltaes specafied an ¶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 ~s not d~rectly related to the promotion of local tourism and
the convenlaon and hotel industry or the performance of the person's job m an efficaent and
professional manner
III. RECORDKEEPING AND REPORTING REQUIREMENTS
3.1 Budget.
(a) The CHAMBER shall prepare and subrmt to the Caty Manager of the CITY an annual
budget (see Exinint "A") as approved by the City Council for each calendar year, for such
operations of the CHAMBER m which the hotel tax funds shall be used by the CHAMBER Tins
budget shall specifically adentafy proposed expendatures of hotel tax funds by the CHAMBER In
other words, the CITY should be able to audtt specafically where the funds in the separate account
relatang tO hotel tax funds wall be expended The CITY shall not pay to the CHAMBER any hotel
tax revenues as set forth m Section I oftfus contract dunng any fiscal year of tins Agreement unless
Page 3
a budget fbr such mepective fiscal year has been approved in wnttng by the Denton Caty Council
authonzm~ the expendature of funds Failure to submit an annual budget may be eonsadered a
breach of contract, and af not remedied is considered grounds for termination of t!us Agreement as
stated m paragraph 4 2
(b) The CHAMBER acknowledges that the approval of such budget by the Denton City
Council creates a fiduciary duty an the CHAMBER with respect to the hotel tax funds prod by the
CITY to the CHAMBER under th~s Agreement The CHAMBER shall expend hotel tax funds only
in the magnet and for the purposes specified an flus Agreement, TEX Tax CODE §351 101(a) and an
the budge~ as approved by the CITY
3.2 Separate Accounts. The CHAMBER shall mmntaln any hotel tax funds prod to the
CHAMBER by the CITY in a separate bank account wath segregated accounting, such that any
reasonable person can rewew the source of expenditures of tax funds A bank reconcthatlon report
(see Exlublt "B") is reqmred with each quarterly report
3.3 Filaaneml Records. The CHAMBER shall mmntmn complete and accurate fmancml
records of each expendtture of the hotel tax funds made by the CHAMBER These funds are
reqmred to be elassffied as resmcted funds for audated financial purposes, and may not be used for
supporting serrates, including, but not hmated to, auditing fees and attorney's fees Upon
reasonably advance written request of the Denton Caty Council, the C~ty Manager or desagnate, or
any other person, shall make such financial records avmlable for mspectmn and review by the party
making the request CHAMBER understands and accepts that all such financml records, and any
other records relating to tbas Agreement shall be subJeCt to the Public Information Act, TEX GOV'T
CODE, ch 1552, as hereafter amended
3.4 Qaarterly Reports After lmtial receipt of hotel tax funds, and wltlun thlrty days after the
end of every quarter thereafter, until all funds have been expended and reported to the CITY,
CHAMBER shall furmsh to CITY (1) a performance report of the work performed under fins
Agreement describing the actlvattes performed pursuant to tbas Agreement during that contxact
quarter, {2) a hst of the expendatures made with regard to hotel tax funds pursuant to lex TAX
CODE §351 101(c), and (3) a copy of all financial records (e g, receipts, mvomes, bank statements,
and other i'elevant documentation) Both the performance and expenditure reports wall be m a form
either determined or approved by the Caty Manager or designate (see Extublt "B') The
CHAMBER shall respond promptly to any request from the City Manager of the CITY, or
designate; for addational mformataon relating to the actavlties performed under thas Agreement
3 5 Notice of Meethags. The CHAMBER shall give the Caty Manager of the CITY reasonable
advance written nottce of the time and place of all meetings of CHAMBER's Board of Directors, as
well as any other meeting of any constituency of the CHAMBER at wtuch tins Agreement or any
matter th~ subject of flus Agreement shall be considered Ttus promslon shall not be deemed to
reqmre the CHAMBER to g~ve notice of any executive session of the Executive Committee of the
CHAMBER
Page 4
IV TERM AND TERMINATION
4 1 Term. The term of this Agreement shall commence on January 1, 2001 and termmate at
midmght on December 31, 2001 This term shall be a period of one year
4 2 Termination Without Cause.
(a) This Agreement may be terminated by either party, with or without cause, by giving
the other party sixty (60) days advance written not. ce
(b) In the event this contract is terminated by either party pursuant to Section 4 2(a),
the CITY agrees to reimburse the CHAMBER for any contractual obligations of the CHAMBER
undertaken by the CHAMBER m satisfactory performance of those actxvltles specified in ¶¶2 1
and 2 2 above and that were approved by the Council through the budget, as noted in ¶3 1 This
reimbursement is conditioned upon such contractual obhgatlons having been incurred and
entered into in the good faith performance of those services contemplated in ¶¶2 1 and 2 2 above,
and further conditioned upon such contractual obhgatlons 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 CHAMBER or to assume the performance of any contractual
obligations of the CHAMBER for or trader any contract entered into by the CHAMBER as
contemplated herein shall not exceed 66 2/3% of the current quarterly payment
(c) Further, upon termmat~on pursuant to ¶4 2(a), the CHAMBER will provide the
CITY 1) Within 10 business days from the termination notification, a short-term budget of
probable expenditures for the remaining 60 day period between termination notification and
contract termlnataon This budget will be presented to Council for approval within 10 business
days after receipt by CITY If formal approval is not given within 10 business days and the
budget does not eontmn any expenchtures that would be prohibited by the Texas Tax Code, and
is within the current contractual period approved budget, the budget w~ll be considered
approved, 2) Wltlun 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
oeenrred smee the last reqmred reporting period, 4) a final accounting of all expenditures and tax
funds on the day of termination The CHAMBER will be obhgated to return any unused funds or
funds determmed to be used improperly Any use of remaining funds by the CHAMBER after
notification of termmatlon is conditioned upon such contractual obhgatlons having been incurred
and entered into in the good faith performance of those services contemplated in 2 1 and 2 2
above, and further enndltloned upon such contractual obhgations having a term not exeeedmg
the full term &this Agreement
4 3 AutomafleTerminaflon Tbas Agreement shall automatically tenmnate upon the
ocenrrence of any of the following events
(a) The tenmnat~on of the legal existence of the CHAMBER,
Co) The msolvency of the CHAMBER, the filing of a petition in bankruptcy, either
voluntarily or involuntarily, or an asSlgrunent by the CHAMBER for the benefit of crechtors,
Page 5
(c) The continuation of a breach of any of the terms or cond~ttons of this Agreement by
e~ther the CITY or the CHAMBER for more than thirty (30) days after written not,ce of
such breach ~s g~ven to the breaching party by the other party, or
(d) The fmlure of the CHAMBER to submit a financml quarterly report wtuch comphes
w~th the reporting procedures reqmred herein 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 Notwithstanding any other prowmon
of flus Agreement, to mitigate damages and to preserve ewdence and ~ssues for judlcml
determination, e~ther party shall have the right to ter~mnate flus Agreement upon ~mmedlate
notme to the other party m the event that any person has instituted ht~gat~on concermng the
activities of the non-terminating party, and the terminating party reasonably beheves that
such acttv~t~es are reqmred or prohibited under flus Agreement
4.5 In ~the event that this Agreement ~s terminated pursuant to ¶¶4 3 or 4 4, CHAMBER agrees
to refund, any and all unused funds, or funds determined by the CITY to have been used
improperly, w~thm 30 days at, er termmatlon of tins Agreement
V. GENERAL PROVISIONS
5.1 SUbcontract for Performance of Services. Noflung ~n flus Agreement shall prohibit, nor
be construed to prohibit, the agreement by the CHAMBER w~th another private entity, person, or
orgamzat~gn for the performance of those services described m ¶2 1 above In the event that the
CHAMBER enters ~nto any arrangement, contractual or otherwise, w~th such other entity, person or
orgamzatton, the CHAMBER shall cause such other entity, person, or orgamzat~on to adhere to,
conform to, and be anbJect to all prowsmns, terms, and conditions of tins Agreement and to Tex
TAX Coos ch 351, ~nclud~ng reporting reqmrements, separate funds maintenance, and hmatatmons
and prolubttmns pertaining to expenchture of the agreed payments and hotel tax funds
5.2 Independent Contractor The CHAMBER shall operate as an independent contractor as
to all services to be performed under flus Agreement and not as an officer, agent, servant, or
employee of the CITY The CHAMBER shall have exclusive control of ~ts operations and
performance of servlcas hereunder, and such persons, entrees, or orgamzat~ons performmg the same
and the CHAMBER shall be solely responsible for the acts and omissions of its directors, officers,
employees, agents, and subcontractors The CHAMBER shall not be considered a partner or joint
venturer wtth the CITY, nor shall the CHAMBER be considered nor ~n any manner hold ~tself out
as an agent or of~clal representative of the CITY
5 3 Indemmfieation. THE CHAMBER 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 CHAMBER 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 CHAMBER, ITS OFFICERS, EMPLOYEES,
AGENTS~ SUBCONTRACTORS, LICENSEES AND INVITEES
5.4 Assignment. The CHAMBER shall not assign flus Agreement w~thont first obtalmng the
written consent of the CITY
5.5 N0flee. Any notxce requtred to be given under this Agreement or any statute, ordinance, or
regulatmn~ shall be effective when g~ven m writing and deposited m the Umted States mall, ce~fied
m0al, return receipt requested, or by hand-dehvery, addressed to the respective parties as follows
CITY CHAMBER
City Manager Denton Black Chamber of Commerce
City of Danton Ehhu Cnllesp~e
215 E McKmney P O Box 51026
Denton, TX 76201 Denton, Texas 76206
5 6 Inurement. Th~s Agreement and each prows~on hereof, and each and every right, duty,
obhgatxon~ and habthty set forth hereto shall be binding upon and ~nure to the benefit and obhgat~on
of the CITY and the CHAMBER and their respective successors and assigns
5 7 Appheation of Laws. All terms, condmons, and prov~s~ons of th~s Agreement are subJeCt
to all applicable federal laws, state laws, the Charter of the C~ty of Denton, all ordinances passed
pursuant thereto, and all jud~exal determinations relative thereto
5.8 EXclusive Agreement. Tins Agreement contmns the entire understanding and constitutes
the entire, agreement between the part,es hereto concerning the subjeCt matter contmned here~n
There are no representations, agreements, arrangements, or understandings, oral or written, express
or ~mphed, between or among the pafaes hereto, relating to the subject matter of flus Agreement,
which are not fully expressed hereto The terms and conditions of th~s Agreement shall prevoal
notw~thst~ndmg any variance ~n flus Agreement from the terms and conditions of any other
document, relating to this transaction or these transactions
5.9 Duplicate Originals. Th~s Agreement ~s executed ~n duphcate originals
5.10 Headings. The headings and subheadings of the various seCtions and paragraphs of tbas
Agreement are inserted merely for the purpose of convemence and do not express or maply any
lumtat~on~ defirut~on, or extension of the specific terms of the section and paragraph so designated
5.11 Severabillty. If any section, subsection, paragraph, sentence, clause, phrase or word m tbas
Agreemer~t, or appheat~on thereof to any person or c~rcumstance ~s held ~nvahd by any court of
competertt jurlsdlctmn, such holchng shall not affect the vahd~ty of the remalmng pomons of tlus
Agreemeat, and the part, es hereby declare they would have enacted such remalmng portmns despite
any such inval~/hty
Page 7
5 12 Insurance. The CHAMBER shall, at a m~mmum, provide insurance as follows
$500,000 Commercial General L~abthty, or $1,000,000 Event Insurance, covenng
any event held on C~ty property
Statutory Workers' Compensation and Employers' Lmblhty
($100,000/$500,000/$100,000)
$500,000 Business Automobile Lmbfl~ty on any owned, non-owned or bared
vebaeles
The CITY must be named as an additional ~nsured on all pohc~es (except Workers' Compensatmn)
and proof of coverage shall be submitted prior to any payment by the CITY
EXECUTED tlus ,ffL~ day of c~.Oj~./'/7.~t'~ ,2000
THE CITY OF DENTON, TEXAS
ATTEST , / / APPRO~~
ff~XlNIFEI~WAL-TERS, ~" ~_L_ PR_O_UTY,
~CITY SECRETARY ~ CITY ATTORNEY
O N ON
By ~j~Z~t~
Chmrman/Dlrector
ATTEST APPROVED AS TO LEGAL FORM
By By
Secretary
Page 8
Exhibit A
DENTON BLACK CHAMBER OF COMMERCE
BUDGET PROPOSAL
PROGRAM YEAR 2001
REQUESTED
*PROGRAM/ACTIVITY AMOUNT
ADVERTISING
Newspaper Advert~sing 2,000
Bmr. hum for festival 1,000
Posters, intemet, b~llboard, cop~es 1,000
Radio 2,000
Travel - Promobon (Tyler, Ausbn) 1,000
$ ?,000
ADMINISTRATION
Blues Festival Fac~l~tator/Pubhc~st 1,500
General Office Supphes 500
Building Oparatlons 1,000
$ 3,000
ART
Arbsts 2,000
Sound Equipment 2,000
$ 4,000
TOTAL $ 14,000
*Funding for Blues Feshval Event Only
DENTON BLACK CHAMBER OF COMMERCE
FINANCIAL REPORT Exhibit B
Program Year 2001
15T 2ND 3RD 4TH YEAR BUDGET
QUARTER QUARTER QUARTER QUARTER to vs
DATE ACTUAL
$o $o $o $o $o $o
$0 $0 $0 $0 $0 $14,000
0 0 0 0 0 0
$0 $0 $0 $0 $0 $14,000
$0 $0 $0 $0 $0 $2,000
0 0 0 0 0 1,000
0 0 0 0 0 1,000
0 0 0 0 0 2,000
0 0 0 0 0 1,000
$0 $0 $0 $0 $0 $7,000
$0 $0 $0 $0 $0 $1,500
0 0 0 0 0 500
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 2,000
$0 $0 $0 $0 $0 $4,000
$0 $0 $0 $0 $0 $14,000
$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 Subm Program D~ector