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1999-457AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON PARKS FOUNDATION FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS ~ That the Mayor is hereby authorized to execute an agreement between the City of Denton and the Denton Parks Foundation for the payment and use of hotel tax revenue, under the terms and conditions contained m the agreement, a copy of which is attached hereto and made a part hereof ~ That tins ordinance shall become effective immediately upon its passage and approval 1999 ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON PARKS FOUNDATION ON BEHALF OF THE JUNETEENTH COMMITTEE (CY2000) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEMENT made between the City of Denton, Texas, a mumc~pal corporalaon (the "CITY"), and the Denton Parks Foundation, a non-profit association incorporated under the laws of the State of Texas (the "FOUNDATION") WHEREAS, Tex Tax Code §351 002 authorizes the CITY to levy by ordinance a municipal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the consideration prod by a hotel occupant, and WHEREAS, by orthnanee, the CITY has provided for the assessment and collection of a mumclpal hotel occupancy tax m the City of Denton of seven percent (7%), and WHEREAS, Tex Tax Code §351 101(a) authorizes the CITY to use revenue from its mumcipal hotel occupancy tax to promote tourism and the convention and hotel mdustty by advertising and conducting soheaat~ons and promotional programs to attract tourists and convention delegates or registrants to the mummpahty or its vlmmty, and WHEREAS, the FOUNDATION is well eqmpped to perform those actamt~es, and WHEREAS, Tex Tax Code §351 101(c) authonzes the CITY to delegate by contract with the FOUNDATION, as an independent entity, the management and supervision of programs and activities of the type desenbed heremabove funded w~th revenue from the mumcipal hotel occupancy tax, NOW, THEREFORE, m consideration of the performance of the mutual covenants and promises contamed hereto, the CITY and the FOUNDATION agree and contract as follows I. HOTEL TAX REVENUE PAYMENT 1 1 Consideration. For and in consideration of the act~wtles to be performed by the FOUNDATION under flus Agreement, the CITY agrees to pay to the FOUNDATION a portion of the hotel tax revenue collected by the CITY at the rates and an the manner specified herein (such payments by the CITY to the FOUNDATION sometmaes hereto 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 meamngs (0 The term "hotel tax revenue" shall mean the gross monies collected and received by the City as mumclpal hotel occupancy tax at the rate of seven percent (7%) of the price prod for a room m a hotel, pursuant to Texas Tax Code 351 002 and City Ordinance Hotel tax revenue will include penalty and interest related to the late payments of the tax revenue by the taxpayer 0Q The term "Collection period" 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 (m) 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 tune (t e, fiscal year or fiscal quarter), less (1) attorney and auchtang costs incurred dunng such relevant period of t~me for costs of enllectmn or auditing of hotel taxpayers Attorney and anchtmg costs include fees prod to attorneys or agents not in the regular employ of the CITY for winch attorneys or agents effect compliance or collection of the hotel tax from taxpayers, and (2) court costs and other expenses incurred ~n litigation against or auditing of such taxpayers 0v) The term "contract quarter" shall refer to any quarter of the calendar year m winch tins Agreement ~s in force Contract quarters will end on March 31st, June 30th, September 30~, and December 31st of each contract year (b) In return for satisfactory performance of the actlvatles set forth in this Agreement and all attachments hereto, the CITY shall pay to FOUNDATION an amount of money ~n each contract year equal to the fixed contract amount of Five Thousand Dollars ($5,000) This amount will be divided lin_to no more than two payments Each payment is subject to receipt of unused funds from the prior contract period and the receipt of the requared quarterly reports 1 3 Dates of Payments. (a) The term "payments" shall mean payments by the CITY to the FOUNDATION of those amounts specified m ¶1 2, above, as determined by the hotel tax revenue collected (b) In return for the satisfactory performance of the actiwt~es set forth in tins contract and all attachments thereto, CITY shall pay the FOUNDATION the agreed payments specified in ¶1 2 above by no more than two payments, paymg the fixed contract amount dunng the 1st and 2nd quarter of the calendar year Ifa seennd payment is due, that payment shall be pad upon receipt of the required reports and after the 25th day following the last day of the contract quarter If quarterly,financial and performance reports are not received within thirty (30) days of the end of the applicable quarter, the recipient may be held m breach of tins Agreement The CITY may withhold the quarterly payment(s) until the appropnate reports are received and approved, winch approval shall not unreasonably be withheld 1 4 Other hmitations regarding consideration (a) The funding of tins project m no way commits the CITY to future funchng of th~s program beyond the current contract penod Any future funding is solely the responslinhty of the FOUNDATION Page 2 (b) It is expressly understood that tins contract an no way obhgates the General Fund or any other momes or erechts of the CITY (c) CITY may w~thhold further allocations 1£ CITY determines that FOUNDATION's expendltores deviate materially from thear approved budget II. USE OF HOTEL TAX REVENUE 2 1 Use of Funds. For and m conslderatmn o£th¢ payment by thc CITY to the FOUNDATION of the agreed payments of hotel tax funds specified above, the FOUNDATION agrees to use such hotel tax funds only for advertising and conducting solicitations and promotaonal programs to attract tourists and conventaon delegates or registrants to the mumclpallty or ~ts wcmaty as authorized by TEx TAX CODe §351 101(a) Funds for any calendar year winch are unused by madmght December 31st of that year shall be refunded to CITY witinn tinrty (30) days 2 2 Adm!n~strative Costs. The hotel tax funds received from the CITY by the FOUNDATION may be spent for day-to-day operations, supplies, salaries, office rental, travel expenses, and other admunstrattve costs that are incurred darectly in the performance by the FOUNDATION of those act~vmes specffied m ¶2 1 above and are allowed by TEx TAX CODI~ §351 101(f) 2.3 Specific Restrictions on Use of Funds (a) That po~on of total admunstrattve costs of the FOUNDATION for winch hotel tax funds may be used shall not exceed that portion of the FOUNDATION's admlmstrat~ve costs actually incurred m conducting the acttvltles specified m ¶2 1 above Co) Hotel tax funds may not be spent for travel for a person to attend an event or conduct an activity the primary purpose of wtuch ~s not d~rectly related to the promotion of local tourism and the conv~ntton and hotel industry or the performance of the person's job m an efficient and professional manner III RECORDKEEPING AND REPORTING REQUIREMENTS 3,1 Budget. (a) The FOUNDATION shall prepare and submit to the City Manager of the CITY an annual budget (see Extuint "A") as approved by the City Cotmcd for each calendar year, for such operattons of the FOUNDATION m winch the hotel tax funds shall be used by the FOUNDATION Ttus budget shall specffically identify proposed expenchtures of hotel tax funds by the FOUNDATION In other words, the CITY should be able to audzt specifically where the funds m the separate account relating to hotel tax funds will be expended The CITY shall not pay to the FOUNDATION any hotel tax revenues as set forth m Sectaon I of ttus contract dunng any fiscal year of tbas Agreement unless a budget for such respective fiscal year has been approved m writing by the Denton City Council authorizing the expenchture of funds Fmlure to subrmt an annual budget may be eonsxdered a breach of contract, and ff not remeched zs considered grounds for termination ofth~s Agreement as stated m paragraph 4 2 P~e3 Co) The FOUNDATION acknowledges that the approval of such budget by the Denton City Council creates a fiduciary duty m the FOUNDATION w~th respect to the hotel tax funds paid by the CITY to the FOUNDATION under th~s Agreement The FOUNDATION shall expend hotel tax funds only m the manner and for the purposes spectfied ~n th~s Agreement, TEx TAx CODE §351 101(a) and m the budget as approved by the CITY 3 2 Separate Accounts. The FOUNDATION shall mmntmn any hotel tax fimds paid to the FOUNDATION by the CITY m a separate bank account with segregated accounting, such that any reasonable person can review the source of expenditures of tax funds A bank reconclhation report (see Extub~t "B") is required w~th each quarterly report 3 3 Financial Records. The FOUNDATION shall maintain complete and accurate financial records of each expenchture of the hotel tax funds made by the FOUNDATION These funds are required to be classified as restricted funds for audited fmanmal proposes, and may not be used for supporting serwces, mclud~ng, but not hrmted to, auditing fees and attorney's fees Upon reasonably advance written request of the Denton C~ty Council, the City Manager or designate, or any other person, shall make such finanmal records available for inspection and review by the party making the request FOUNDATION understands and accepts that all such financial records, and any other records relating to this Agreement shall be subject to the Pubhc Information Act, TEX Gev'? CODE, ch 552, as hereafter emended 3.4 Quarterly Reports. After lmtml recetpt of hotel tax funds, and within thirty days after the end of every quarter thereafter, until all funds have been expended and reported to the CITY, FOUNDATION shall furmsh to CITY (1) a performance report of the work performed under tins Agreement describing the activities performed pursuant to flus Agreement during that contract quarter, and (2) a list of the expenrhtures made w~th regard to hotel tax funds pursuant to TEx TAx Cove §351 101(c) Both the performance and expenditure reports will be in a form either deterrmned or approved by the C~ty Manager or designate (see Exhibit "B") The FOUNDATION shall respond promptly to any request from the City Manager of the CITY, or designate, for ad(htlonal mformation relating to the activities performed under this Agreement 3 5 Notice of Meetings The FOUNDATION shall g~ve the C~ty Manager of the CITY reasonable advance written nottce of the t~me and place of all meetings of FOUNDATION's Board of Dtrectors, as well as any other meeting of any constituency of the FOUNDATION at wluch flus Agreement or any matter the subject of tbas Agreement shall be considered This provision shall not be deemed to require the FOUNDATION to give notice of any executive session of the Executive Commlttile of the FOUNDATION IV TERM AND TERMINATION 4 1 Term The term of th~s Agreement shall commence on January 1, 2000 and terminate at mldmght on December 31, 2000 This term shall be a period of one year 4 2 Termination Without Cause (a) Tlus Agreement may be terminated by ezther party, with or wzthout cause, by gtving the other party sixty (60) days advance wntten notice Page 4 (b) In the event this contract as terminated by either party pursuant to Section 4 2(a), the CITY agrees to reimburse the FOUNDATION for any contractual obhgatlons of the FOUNDATION undertaken by the FOUNDATION in satisfactory performance of those actlwtaes specafied m ¶¶2 1 and 2 2 above and that were approved by the Council through the budget, as noted m ¶3 1 This rexmbursement xs condmoned upon such contractual obhgataons having been recurred and entered into m the good faith performance of those servaces contemplated m ¶¶2 1 and 2 2 above, and further condmoned upon such contractual obhgatlons having a term not exceeding the full term of this Agreement Notwathstandang any provaslon hereof to the contrary, the obhgatlon of the CITY to reamburse the FOUNDATION or to assume the performance of any contractual obllgatxons of the FOUNDATION for or under any contract entered into by the FOUNDATION as contemplated hereto shall not exceed 66 2/3% of the current quarterly payment (c) Further, upon termination pursuant to ¶4 2(a), the FOUNDATION wall prowde the CITY 1) Within 10 business days from the termmatxon notaficataon, a short-term budget of probable expand~tures for the remmnmg 60 day period between termmataon not~ficataun and contract termmat~on This budget will be presented to Council for approval wathm 10 business days after receipt by CITY If formal approval xs not given within 10 business days and the budget does not contain any expendxtures that would be prohlhited by the Texas Tax Code, and ~s wathm the current contractual period approved budget, the budget wall be considered approved, 2) Wathin 30 days, a full accounting of all expendatures not previously audated by the Caty, 3) Wathin 5 business days of a request from the CITY, a hstang of expendatures that have occurred since the last reqmred reporting period, 4) a final accounting of all expendatures and tax funds on the day of termlnatxon The FOUNDATION will be obhgated to return any unused funds or funds determined to be used ~mproperly Any use of remaunng funds by the FOUNDATION after notaficatxon of term~nataon as condxtaoned upon such contractual obhgatmns having been mcarred and entered into m the good faith performance of those servxces contemplated m 2 1 and 2 2 above, and further condatloned upon such contractual obhgatmns hawng a term not exceeding the full term of this Agreement 43 Automatic Termination. This Agreement shall automaUcally terminate upon the occurrence of any of the following events (a) The tenmnatxon of the legal exastence of the FOUNDATION, (b) The insolvency of the FOUNDATION, the filing of a petmon m bankruptcy, e~ther voluntarily or mvoluntanly, or an assagnment by the FOUNDATION for the benefit of c~echtors, (c) The contmuataon of a breach of any of the terms or conditions of tins Agreement by e~ther the CITY or the FOUNDATION for more than tl~rty (30) days after written not~ce of such breach ~s g~van to the breaching party by the other party, or (d) The failure of the FOUNDATION to subn~t a financml quarterly report which comphes with the reporting procedures reqmred hereto and generally accepted accounting pnnciples Page 5 prior to the begun'aug of the next contract term, or quarterly as reqmred by Section 1 3 h~eof 4.4 Right to Immediate Termination Upon Litigation Notwithstanding any other pmwslon of flus Agreement, to n~atigate damages and to preserve evidence and ~ssues for juthclal determination, either party shall have the right to tenmnate flus Agreement upon Lmmedlate notice to the other party ~n the event that any person has instituted htigation concermng the act~wttes of the non-terminating party, and the terminating party reasonably beheves that such activities are reqmred or pmtublted under flus Agreement 4 5 In the event that flus Agreement ~s terminated pursuant to ~4 3 or 4 4, FOUNDATION agrees to refund any and all unused funds, or funds determined by the CITY to have been used unproperly, w~th~n 30 days after termination of flus Agreement V. GENERAL PROVISIONS 5.1 SUbcontract for Performance of Services. Noflung ~n tlus Agreement shall prolublt, nor be construed to pmlub~t, the agreement by the FOUNDATION wath another private entity, person, or orgamzat~on for the performance of those services described in ¶2 1 above In the event that the FOUNDATION enters rotc any arrangement, contractual or otherwise, with such other entity, person or orgamzatlon, the FOUNDATION shall cause such other entity, person, or orgamzation to adhere to, conform to, and be subject to all prowslons, terms, and conthtions of flus Agreement and to TEX TAX CODE ch 351, including repo~ng reqmrements, separate funds mmntenance, and lumtatlons and proinb~t~ons pertaunng to expenditure of the agreed payments and hotel tax funds 5 2 Independent Contractor The FOUNDATION shall operate as an independent contractor as to all serwces to be performed under flus Agreement and not as an officer, agent, servant, or employee of the CITY The FOUNDATION shall have exclusive control of ~ts operations and performance of services hereunder, and such persons, entitles, or orgamzations performing the same and the FOUNDATION shall be solely responsible for the acts and ormss~ons of 1ts directors, officers, employees, agents, and subcontractors Thc FOUNDATION shall not be considered a partner or joint venturer w~th the CITY, nor shall the FOUNDATION be considered nor ~n any manner hold ~tself out as an agent or official representative of the CITY 5.3 Indemnification. The FOUNDATION agrees to mdemmfy, hold harmless, and defend the CITY, ~ts officers, agents, and employees from and against any and all claims or stats for injuries, damage, loss, or hab~iny of whatever land or character, arising out of or in counection with the performance by the FOUNDATION or those serwces contemplated by flus Agreement, including all such chares or causes of action based upon common, constitutional or statutory law, or based, ~n whole cfi m par~, upon alleganons of neghgent or intentional acts of FOUNDATION, 1ts officers, employees, agents, subcontractors, hcensees and lnvltees 5 4 Assignment. The FOUNDATION shall not assign flus Agreement w~thout first obtaining the wntten consent of the CITY P~e6 5 5 Notice. Any notice required to be given under tbas Agreement or any statute, ordinance, or regulation, shall be effective when given m writing and deposited m the Umted States mall, certified mall, remm receipt requested, or by hand-dehvery, addressed to the respective pames as follows CITY FOUNDATION City Manager Denton Parks Foundation City of Denton Jean Keller 215 E MeKmney 321 E McKmney Denton, TX 76201 Denton, TX 76201 5.6 Inurement. Tbas Agreement and each provision hereof, and each and every right, duty, obligation, and hablhty set forth herein shall be bmdmg upon and inure to the benefit and obhgat~on of the CITY and the FOUNDATION and their respective successors and assigns 5 7 Application of Laws All terms, conchtlons, and provisions of tbas Agreement are subject to all apphcable federal laws, state laws, the Charter of the City of Denton, all ordinances passed pursuant thereto, and all jud~cml determinations relative thereto 5.8 Exclusive Agreement. Tbas Agreement contains the entire understanding and constitutes the entire agreement between the parties hereto enncermng the subject matter enntamed hereto There are no representations, agreements, arrangements, or understandings, oral or written, express or lmphed, between or among the part,es hereto, relating to the subject matter of this Agreement, which are not fully expressed herem The terms and conchtlons of flus Agreement shall prevail notwithstanding any variance in tl~s Agreement from the terms and conditions of any other document relattng to th~s transaction or these transactions 5 9 Duplicate Originals. This Agreement is executed m duplicate originals 5.10 Headings. The headings and subheadmgs of the vinous sections and paragraphs of thts Agreement are mserted merely for the purpose of convenience and do not express or ~mply any hmatat~on, defimt~on, or extension of the specific terms of the section and paragraph so designated 5 11 Severability If any section, subsection, paragraph, sentence, clause, phrase or word m this Agreement, or apphcat~on thereof to any person or circumstance is held invalid by any court of competent junschct~on, such holdmg shall not affect the vahchty of the remalmng portions of th~s Agreement, and the part, es hereby declare they would have enacted such remaining portions despite any such mvahdlty 5 12 Insurance. The FOUNDATION shall, at a m~mmum, provide ~nsurance as follows $500,000 Commercial General Liability, or $1,000,000 Event Insurance, covermg any event held on C~ty property Statutory Workers' Compensation and Employers' L~ab~hty ($100,000/$500,000/$100,000) $500,000 Business Automobile Liability on any owned, non-owned or bared vehicles Page 7 The CITY must be named as an ad&taonal insured on all pohcles (except Workers' Compcmsat~on) and proof of coverage shall be submitted prior to any payment by the CITY THE CITY OF DENTON, TEXAS By JACK~-- ATTEST APPROVE~ORM By ~"J~'J/~ff2J,/~fl.~/j~~ JEi'qNIFER WALTERS, '- y~t~_.RB..E_RT~L~.P~R?yTY, / CITY SECRETARY -~ tJtl3: Att~t~¥ / / DENTON PARKS ~DATION Chalrmtda/D~rector ATTEST APPROVI~D AS TO LEGAL FORM By By Secretary F ~shar~dep6LOL~Our Doeume~Ca~mae~C~HOT Contram~ar~ Framd~o~doe Page 8