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HomeMy WebLinkAboutResolution - 6064 - Agreement - Market Lubbock Inc.- Convention And Tourism - 10_08_1998Resolution No. 6064` Item No. 73. October 8, 1998 .RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Convention and Tourism Agreement with Market Lubbock, Inc., and any associated documents, which Agreement shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 81 A TEST: May rj smell, City Secretary APPROVED AS TO CONTENT: APPROVED AS TO stst City Attorney AS:gs/Convention & Tourism Ag+eementres codocs/October 1, 1999 Resolution No. 6064 Item No. 73 October 8, 1998 CONVENTION AND TOURISM SERVICE AGREEMENT THIS AGREEMENT (the "Agreement") is entered into by and between the CITY OF LUBBOCK, TEXAS, a municipal corporation ("City") and MARKET LUBBOCK, INC., a Texas nonprofit corporation ("MLI"). WHEREAS, pursuant to the terms of Chapter 351 of the Texas Tax Code, City has elected to impose a hotel occupancy tax (the "Hotel Tax") on persons occupying hotel rooms in the City; and WHEREAS, as authorized by law, City has allocated a portion of the revenues generated by the Hotel Tax for purposes of advertising and conducting solicitations and promotional programs to attract tourists and convention delegates or registrants to the City or its vicinity; and WHEREAS, MLI desires to operate a convention and tourism service to promote tourism and convention industry, to increase hotel occupancy and to encourage the use of the Memorial Civic Center and other similar facilities in the City; and WHEREAS, pursuant to Section 351.101(c) of the Texas Tax Code, City desires to delegate to MLI the management and supervision of programs and activities funded with revenue from the Hotel Tax, and MLI desires to accept such delegation; NOW THEREFORE, the parties covenant and agrees as follows: ARTICLE I PROGRAMS AND ACTIVITIES; TERM 1.01 Delegation. City hereby delegates to MLI, and MLI hereby accepts, responsibility for creating, managing, operating, and supervising programs and activities for the purpose of advertising and conducting solicitation and promotional programs to attract tourists and convention delegates or registrants to the City or its vicinity, the programs and activities to be conducted by MLI include, without limitation, the following: (a) Preparing proposals and presentations to meeting planners, convention delegates and other groups desiring to hold conventions within the City; (b) Preparing and distributing materials for the purpose of promoting tourism and conventions in the City and promoting the local hotel industry in general; (c) Making personnel available for tourists and convention delegates desiring to hold conventions within the City and providing other auxiliary services to such persons during their stay in the City; (d) Coordinating the activities of tourists and conventions delegates during their stay in the City; (e) Providing support services to delegates and registrants at conventions within the City, 'including, but not limited to, arranging receptions, arranging social functions, arranging transportation to and from hotels and the airport, and arranging hotel accommodations; and, (f) Assessing promotional and service activities and market trends in the tourism and convention industry in order to maximize the effectiveness of programs and activities undertaken by MLI. 1.02. Prior Agreement. City and MLI recognize that prior to the effective date of this Agreement, City delegated certain convention and tourism responsibilities to Marketing, Entertainment, Travel, Tourism and Sports, Inc. ("METTS") pursuant to the terms of an agreement dated September 22, 1994 (the "Prior Agreement"), which was amended on September 14, 1995, January 11, 1996 and July 11, 1996. The Prior Agreement and delegation contained therein have been terminated and pursuant to the dissolution clause in METTS' Articles of Incorporation, City has received or may receive from METTS certain assets used by METTS in providing convention and tourism services pursuant to the Prior Agreement. City agrees that to the extent any such assets have been or are hereafter received by City, City immediately shall transfer such assets to MLI for use by MLI in conducting is programs and activities hereunder. 1.03 Governmental Requirements. MLI shall conduct its programs and activities in accordance with all applicable laws, rules, statutes and regulations of federal, state and local governments, including, without limitation, the provisions of Chapter 351 of the Texas Tax Code, as the same now exists or hereafter may be enacted and/or amended. 1.04 Term. This Agreement shall be for a term of one (1) year, beginning October 1, 1998 and ending September 30, 1999; provided, however, that there automatically shall be added to such term a one (1) year extension after the initial term if neither City nor MLI gives written notice to the other party on or before April 1, 1999, or any subsequent April V of its intent to terminate this Agreement at the end of its then current term. 1.05. Sports Marketing. City hereby delegates to MLI, and MLI hereby accepts, responsibility for creating and supervising programs and activities for the purpose of visiting participatory and spectator sports marketing. CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-2 ARTICLE II FISCAL MATTERS 2.01. Funding. City agrees to provide funding for the programs and activities conducted by MLI pursuant to the terms of this Agreement by paying to MLI's charitable purposes separate fund a portion of the revenues derived from City's imposition and collection of the Hotel Tax. Such funding shall consist of (i) that portion of the Hotel Tax revenues allocated to `convention and tourism activities' under the provision of Section 26-22, of the City of Lubbock, Texas Code of Ordinances, as the same may be hereafter be amended, and (ii) funding from such other sources as may be approved by City. MLI acknowledges that the funding of its activities by City with Hotel Tax revenues creates and establishes a fiduciary duty on the part of MLI with respect to such funds. 2.02. Revenue Estimates. On or before April 1 of each year during the term of this Agreement, City shall estimate the amount of Hotel Tax revenue which will be collected and paid to MLI during MLI's next fiscal year, and shall provide written notice of that estimate to MLI. MLI's proposed budget for its next fiscal year shall reflect the revenue estimate so provided by City. As soon as reasonably possible following the end of each fiscal year and City's completion of its annual financial audit, City shall determine the amount of Hotel Tax revenue collected by City and allocated herein to the finding of MLI's programs and services during the preceding fiscal year and shall provide written notice of such amount to MLI. In the event the actual amount of such Hotel Tax revenue which is allocated to MLI's programs and activities hereunder shall be either more or less than the actual amount of such revenue paid to MLI with respect to such fiscal year, appropriate adjustments promptly shall be made in MLI's budget for its current fiscal year in order to reduce its budgeted expenditures by an amount equal to any deficiency or to increase its budgeted expenditures by the amount of any excess. 2.03. Budgets. MLI shall prepare and submit to City a detailed annual budget in a form acceptable to City. City and MLI contemplate that the budget shall be submitted in a form substantially identical to the form used by City's departments in its internal budgeting process, provided that such form may be varied by agreement of City and MLI. Each budget shall be submitted to City no later than the April 30 immediately preceding the fiscal year to which such budget relates. Upon receipt of MLI's proposed budget, City shall review such budget and promptly notify MLI of any changes and/or supplements to the proposed budget that the City believes are necessary. City and MLI agree to work with one another and cooperate in good faith to address any such changes and/or supplements to the proposed budget. Following completion of any revisions to the proposed budget, City shall submit the proposed budget to the City Council for review and approval by the City Council in accordance with Chapter 102 of the Texas Local Government Code and Chapter 1, Article X, Paragraph 4, of the City of Lubbock, Texas City Charter. The City's final approval of the budget, including any further revisions thereto which may be required by the City Council, shall be in writing, and no CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-3 expenditures or obligation described in the budget shall be incurred by MLI until final written approval of City has been obtained. City shall be responsible for holding any public hearing on the proposed budget which may be required by applicable law or regulation. The parties acknowledge that METTS has presented the budget for the current fiscal year pursuant to the Prior Agreement to conduct the programs and activities for convention and tourism services and said budget has been approved by City. The parties hereby agree that MLI has the authority to make expenditures contemplated by this Agreement according to the approved METTS budget for the current fiscal year and MLI shall submit a proposed budget on April 1, 1999 pursuant to this Section 2.03. 2.04. Payment. (a) Payment. All funds payable to MLI with respect to any fiscal year shall be paid in four (4) equal quarterly installments, on October 1, January 1, April l,'and June 1 of each fiscal year, beginning October 1, 1998. Upon receipt of such funds, City shall deposit the same in a separate account established by MLI for that purpose at a federally -insured state or national bank or other savings institution in Lubbock, Texas. At MLI's option, such account may be an interest -bearing account, in which case all interest accrued thereon shall be used by MLI only for the purposes described in this Agreement in accordance with the terms of a budget approved by City. (b) Unexpended Funds. To the extent any unexpended funds shall remain at the end of a fiscal year, such unexpended funds are reappropriated to MLI for use during the following year. Unless such unexpended funds already have been included in the approved budget for the following fiscal year or City and MLI otherwise agree, MLI shall determine that budget account or accounts in which such excess funds remain and the excess funds shall be added to the same account or accounts in the following budget in the same proportion. 2.05 Expenditures. Revenues received by MLI under the terms of this Agreement may be spent for costs which are directly related to MLI's charitable purposes, such as supplies, salaries, office rental, travel expenses and other administrative costs, provided that no such revenues may be spent for travel for a person to attend an event or conduct an activity the primary purpose of which is not directly related to the promotion of tourism and convention and hotel industry or the performance of the person's job in an efficient and professional manner. MLI shall not make any expenditure using funds provided hereunder unless such expenditures are incurred pursuant to the terms of a budget approved by City as provided in this Agreement. Anything contained elsewhere in this Agreement to the contrary notwithstanding, MLI shall have the authority to reallocate up to 10% of any budget funds to any other budget account or accounts included in the budget without first securing City's approval. CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-4 2.06 Financial Reporting: MLI shall maintain complete and accurate financial records of each expenditure of funds provided by City pursuant to the terms of this Agreement. All financial records of MLI shall be maintained on an accrual basis, in accordance with generally accepted accounting principles consistently applied. Within thirty (30) days following the end of each fiscal quarter, MLI shall provide to City a written financial statement for such quarter showing all revenues received by MLI from City with respect to such quarter and listing all expenditures of MLI during such fiscal quarter in carrying out its programs and services under this Agreement. MLI agrees to make all of its financial records available to City and, to the extent required by law, to other persons, provided that any inspection or review of MLI's financial records shall be conducted only during MLI's normal business hours at its office. City, at its option, shall be entitled to have an audit of MLI's financial records conducted by an auditor of City's choosing. Additionally, City is aware of the fact that MLI shall have a complete audit of its financial affairs conducted following the end of each fiscal year by MLI's independent auditor, and MLI agrees to provide City with a copy of any audit report furnished to MLI. 2.07. Fiscal Year. For the purposes of this Agreement, MLI's fiscal year shall begin on October 1 of each calendar year and shall end on September 30 of the following calendar year. 2.08. Other Revenue. Nothing contained in this Agreement shall prohibit MLI from obtaining funding for its programs and activities from other sources, including charitable contributions and grants from private foundations and governmental organizations. All funds received by MLI pursuant to the terms of this Agreement shall be maintained in a segregated account and shall not be commingled with any other funds belonging to MLI. No funds paid to MLI pursuant to this Agreement shall be used for any purpose other than the purposes stated in Sections 1.01, 1.05, and 2.05 of this Agreement and, to the extent MLI incurs expenditures in connection with the programs and activities conducted by MLI described in Section 1.01 and 1.05, which also benefit other programs and activities conducted by MLI, such expenditures shall be allocated equitably among the various funding sources available to MLI based upon the relative benefits of such expenditures to the various programs and activities conducted by MLI. 2.09. Funding of Sports Marketing Activities. City agrees to provide funding for the programs and activities conducted by MLI pursuant to the terms of Section 1.05 of this Agreement by paying to MLI a portion of the revenues derived from City's imposition and collection of the Hotel Tax. Such funding shall consist of (i) that portion of the Hotel Tax revenues allocated to `visiting participatory and spectator sports marketing' under the provisions of Section 26-22 of the City of Lubbock, Texas Code of Ordinances, as the same may hereafter be amended, and (ii) funding from other sources as may be approved by City. Separate accounting records shall be maintained by MLI with respect to all funding provided by City to MLI pursuant to this Section 2.09. All funding provided by City pursuant to this Section 2.09 shall be spent only for day-to-day operations of MLI, supplies, salaries, office rental, travel expenses and other expenses relating to the performance of the services described in Section 1.05 (provided that no CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-5 such revenues may be spent for travel for a person to attend an event or conduct an activity the primary purpose of which is not directly related to the promotion of tourism and convention and hotel industry or the performance of the person's job in an efficient and professional manner). MLI shall prepare and submit to City a detailed annual budget with respect to the funding provided by City hereunder, such funding shall be paid to MLI, and MLI shall expend, report and account for such funds all in the same manner as required by the Agreement with respect to funding provided under Section 2.01 thereof. MLI acknowledges that the funding of the activities described herein by City with Hotel Tax revenues creates and establishes a fiduciary duty on the part of MLI with respect to such funds. ARTICLE III PERSONNEL 3.01. Personnel. MLI shall set the qualifications for and shall hire any and all personnel MLI deems necessary to discharge its responsibilities under the terms of this Agreement and shall have the authority to fix the compensation and other benefits payable to MLI's employees. To the extent permitted by applicable law and provided City and MLI agree, MLI may make provision for participation by is directors, officers, and employees in various benefits programs offered by the City to its employees. MLI, in carrying out its programs and activities hereunder, shall be acting solely as an independent contractor and not as an agent or employee of the City. All employees of MLI are employed solely by MLI and do not constitute City employees. MLI shall have the sole right and authority to direct the time, place and manner in which its employees perform the tasks for which they are hired, and shall be solely responsible for all income tax withholding, benefits, unemployment compensation payments and other expenses associated with such employees. All contacts between City and MLI personnel shall be coordinated through the President of MLI's Board of Directors or other such person or persons as MLI's Board of Directors may designate. ARTICLE IV TERMINATION 4.01. Termination. This Agreement may be terminated only by the non -renewal of its term as provided in Section 1.04, by the mutual agreement of City and MLI or by default by either City or MLI as provided in Section 4.02. 4.02. Default. Neither party shall be deemed to be in default under the terms of this Agreement unless and until it has received written notice from the other party specifically describing any failure on its part to perform its duties and obligations hereunder and does not cure such failure within ten (10) days following receipt of such written notice from the other party, provided, however, that in the event the nature of the failure is such that it reasonably cannot be cured within said ten-day period, no default CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-6 shall occur hereunder so long as the party failing to perform commences to cure such failure within said ten-day period and thereafter diligently and in good faith prosecutes such cure to completion. Financial inability or delay shall not be deemed to be sufficient cause to extend the cure period, unless any failure to perform by MLI results from City's failure to timely pay to MLI funds in the amounts and at the times provided elsewhere in this Agreement. 4.03. Remedies Upon Default. If an event of default shall occur under this Agreement, the non -defaulting party may terminate this Agreement upon written notice to the defaulting party and thereafter pursue such other remedies against the defaulting party as may be permitted by applicable law. Anything contained elsewhere in this Agreement to the contrary notwithstanding, however, no director, officer, employee or agent of either party to this Agreement shall be personally liable for any default by such party. 4.04. Procedure Upon Termination. If this Agreement shall terminate, whether by expiration of the term hereof or otherwise, MLI, to the extent it may do so from available funds, promptly shall pay and discharge all outstanding liabilities incurred by MLI during the term of this Agreement and thereafter shall pay and deliver to City all furniture, fixtures, equipment and other assets of MLI which were purchased with funds provided by City hereunder and all unexpended funds provided by City which then are in MLI's possession so that such assets and funds may be used for MLI's charitable purposes. All other assets of MLI shall be disposed of in accordance with the provisions of MLI's Articles of Incorporation and Bylaws. ARTICLE V MISCELLANEOUS 5.01. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. Any modification or amendment of this Agreement shall be in writing and executed by both parties. 5.02. Applicable Law. This Agreement shall be construed and enforced in all respects in accordance with the laws of the State of Texas and the laws of the United States applicable to transactions in Texas. 5.03. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall, for all purposes, be deemed to be an original, and all such counterparts shall together constitute but one and the same agreement. 5.04. Severability. If any provisions of this Agreement or the application thereof to any person or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this agreement or the application of such provision to persons or circumstances, other than those as to CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-7 which it is determined invalid or unenforceable, shall not be affected thereby, and each provision of this,Agreement shall be valid and shall be enforced to the fullest extent permitted by law. 5.05. Captions. The captions in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this Agreement or the scope of content of any of its provisions. 5.06. Notices. (a) Any notice, report, request or demand required, permitted or desired to be given under this Agreement (hereinafter collectively referred to as "Notices") shall be in writing and shall be deemed to have been properly given or served when mailed by registered or certified mail, return receipt requested or personally delivered to the respective party at the following addresses: MLI: Chief Executive Officer Market Lubbock, Inc. City: City Manager City of Lubbock P. O. Box 2000 Lubbock, TX 79457-0001 (b) Any addresses or name specified above may be changed by a Notice given by the addressee to the other party in accordance with Section 5.06(a) above. (c) All Notices shall be deemed effective as of the date of mailing or on the date of personal delivery, as appropriate. Any Notice to be given by any party hereto may be given by counsel for such party. 5.07. Interpretation. Whenever herein the singular number is used, the same shall include the plural, and vice versa, and the masculine gender shall include the feminine and neuter genders, and vice versa, as the context shall require. The section headings used herein are for reference and convenience only and shall not enter into the interpretation hereof. 5.08. Time. Time is of the essence to this Agreement and the obligations of the parties hereunder; provided, however, that if any date specified herein for performance of any duty, obligation or responsibility shall fall on a Saturday, Sunday or legal holiday for national banks doing business in Texas, the time for such performance shall be extended until the next day which is not a Saturday, Sunday or legal holiday for national banks doing business in Texas. CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-8 EXECUTED this 8th day of October , 1998. CITY OF L BBOCK: MARKET LUBBOCK, INC.: BY: WI SITT N AYOR Chief Executive Officer ATTEST: Kay ie Darnell, City Se retary APPROVED AS TO CONTENT: Tommy G nzalez, ana . g Director of Civic Services CONVENTION AND TOURISM SERVICE AGREEMENT PAGE-9