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12 - HOTEL OCCUPANCY TAX AGREEMENTItem No. 12 memorandum TO: Mayor & City Council FROM: John Godwin, City Manager SUBJECT: HOTEL OCCUPANCY TAX AGREEMENT DATE: August 15, 2016 BACKGROUND: As previously reported to you, I have been meeting for several weeks with the Chamber president and board chairman about renewal of the contract with the Lamar County Chamber of Commerce to receive and manage most of the city's hotel occupancy tax (HOT) revenues. The HOT rate in Paris is 7 %, of which 5% is retained by the city for administrative expenses. Of the remainder, three- sevenths of HOT proceeds are used for the Love Civic Center and four - sevenths for the VCC. STATUS OF ISSUE: The major issue for the chamber is the ability to invest large sums to improve the center and make capital maintenance improvements when necessary. This necessitates a longer term capital lease, which is pretty common practice for management leases, though new to us. The city would have authority to approve or deny any debt incurred on the center or its grounds. Two other changes from the existing agreement include the possibility of an additional 1% (which I strongly recommend be required to be used for capital maintenance only if ever adopted), and granting the LCC board the authority to give priority to events that will bring in overnight visitors (since that is the reason the HOT legally exists). BUDGET: NA. RECOMMENDATION: Approve agreement, with any modification needed. AGREEMENT This Agreement shall be between the City of Paris, Texas, a home rule municipal corporation (hereinafter CITY), and the Lamar County Chamber of Commerce, a 501 C -6 not- for- profit corporation (hereinafter CHAMBER), which in consideration of the mutual covenants, agreements, stipulations, and payments, do hereby contract and agree as follows. Section 1. Responsibilities of Parties. CITY shall: 1. Convey to CHAMBER quarterly distributions of the Hotel Occupancy Tax collected pursuant to state law. 2. Retain five percent (5 %) of quarterly Hotel Occupancy Tax proceeds to pay CITY's administrative costs, and for the purpose of funding special purpose grants to enhance tourism as approved by the City Council of Paris, and consistent with state law. CHAMBER shall: 1. Operate, support, fund, staff, and otherwise maintain an active Visitors and Convention Council (VCC) for the purpose of promoting tourism and the convention and hotel industry within the City of Paris. 2. Use three- sevenths of HOT proceeds received from CITY for operation and maintenance of LCC facilities, and other such proceeds as are generated by or contributed to, the LCC facilities to use, staff, maintain, and operate the Love Civic Center (LCC) facilities for the operation of a conference, meeting, convention, and exhibit center for holding conventions, meetings, exhibits and other events and activities to attract conventions, tourists, and other visitors and for the benefit of the City and the general public. 3. Deposit all Hotel Occupancy Tax (HOT) proceeds into a separate banking account at a local financial institution which is federally chartered and FDIC - insured in such a manner that no other funds of CHAMBER are or can be comingled with HOT proceeds. 4. Submit for approval by CITY, on or before August 1 of each year, a proposed annual program of work and budget for the VCC and for LCC facilities. 5. Submit minutes of the meetings of the VCC and LCC board to CITY within thirty (30) days of approval of said minutes. 6. Comply with all state statutes and city ordinances pertaining to the use of leased facilities and of Hotel Occupancy Tax proceeds. 7. Maintain complete and accurate financial records of all expenditures of HOT and make such records available for review and inspection upon request of CITY. 8. Provide written quarterly reports to CITY, summarizing revenues and expenditures, as well as convention and tourism activities and statistics, and present such reports verbally upon request of CITY. 9. May, at its discretion, contract with qualified third parties to provide high quality promotion of tourism and the hotel industry. Section 4. Hold harmless. CHAMBER does hereby agree to release, indemnify, and hold CITY and its officers and employees harmless from and against any and all demands, debts, liabilities, suits, claims, and causes of action of every kind and character whatsoever for damage or injury (including death) to persons and/or property occurring on the LCC facilities and resulting from CHAMBER's invitees, guests, agents, servants, or employees' presence upon, use, occupancy or enjoyment of the LCC facilities. CITY shall not be liable to CHAMBER invitees, guests, agents, servants, employees, or visitors due to the improvements located thereon, or hereafter constructed, or any other condition of the LCC facilities being improperly constructed, maintained, or being or becoming out of repair. However, both CHAMBER and CITY shall carry all requisite insurances. Waiver by CITY of any breach by CHAMBER of the terms, covenants, conditions, or provisions of the Agreement shall not be deemed to be a waiver of any other breach of the same or other term, covenant, condition, or provision of this Agreement terminated for any of the reasons set out above and shall not bar the right of CITY to subsequently terminate this Agreement for any of the reasons set out above. Section 5. Severability, complete agreement, modification. In case any one or more of the provisions contained in the Agreement shall, for any reason, be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of the Agreement, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been included in the Agreement. This Agreement constitutes the sole and only Agreement of the parties to this Agreement and supersedes any prior understandings or written or oral agreements between the parties respecting the subject matter of this Agreement. However, this Agreement may be executed in duplicate originals, and each shall be considered an original document. No amendment, modification, or alteration of the terms of this Agreement shall be binding unless it is in writing, dated subsequent to the date of this Agreement, and duly executed by the parties to this Agreement. Section 6. Term. Recognizing the need of CHAMBER to invest and reinvest in LCC and facilities, and to consider long -term professional services agreements and programming for the promotion of tourism and the convention and hotel industry, this Agreement shall remain in full force and effect for a period of ten years, except that either party may terminate this Agreement, with or without cause, with a minimum of 364 days written notice. Recognizing that CITY will necessarily assume responsibility for any remaining debt for capital improvements to LCC facilities, CHAMBER shall submit to and receive approval of CITY prior to the issuance of any such debt. Section 7. Notice. All notices, demands, payments and other communications required to be given or made hereunder shall be in writing and shall be duly given if delivered by hand, messenger, telecopy or reputable overnight courier or if mailed by certified or registered mail, first class postage prepaid, and shall be effectively received upon the date of such delivery or two (2) days after such mailing, to the respective parties hereto at the addresses set forth below, or to such other address furnished in writing to the other party hereto. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Lease as of the date and year first set forth above written. ATTEST: CITY OF PARIS, TEXAS By: Janice Ellis, City Secretary APPROVED AS TO FORM: By: Stephanie Harris, City Attorney M. Dr. A. J. Hashmi, Mayor LAMAR COUNTY CHAMNER OF COMMERCE IIn President STATE OF TEXAS COUNTY OF LAMAR This instrument was acknowledged before me on _ day of , 2016 , 2016, by Texas Notary Public My Commission Expires: