HomeMy WebLinkAbout10-21-19 City Commission Packet Materials - A5. Agreement with the Bozeman Chamber of Commerce for the TBID Dissolution
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Greg Sullivan, City Attorney
Andrea Surratt, City Manager
SUBJECT: Authorize City Manager to Sign Agreement with the Bozeman Chamber
of Commerce for Dissolution of the Bozeman Tourism Business
Improvement District
MEETING DATE: October 21, 2019
AGENDA ITEM TYPE: Action
RECOMMENDATION: We recommend you authorize the City Manager to sign the
Agreement for Administration of Bozeman Tourisms Business Improvement District Dissolution
with the Bozeman Area Chamber of Commerce (the “Chamber”).
SUGGESTED MOTION: I move to authorize the City Manager to sign the Agreement for
Administration of Bozeman Tourisms Business Improvement District Dissolution with the
Bozeman Area Chamber of Commerce.
BACKGROUND: Earlier this year, the board members of the Bozeman Tourism Business
Improvement District (the “District”) determined to sunset the District and instead create a new
countywide tourism business improvement district. Over the past several months, we’ve worked
on the process for dissolution of the District with Daryl Schliem, the Executive Director of the
Bozeman Chamber of Commerce (the “Chamber”). Pursuant to Montana law, Mr. Schliem is
also the director of the District. The result of those discussions lead to the attached agreement.
The basic approach to the agreement requires the Chamber, through Mr. Schliem, to manage the
dissolution process for the District. The Chamber will apply the assessments collected this fall by
the City (for room charges during FY19) to pay off the outstanding obligations of the District.
These obligations are listed on Exhibit A to the agreement. Once the obligations of the District
are paid, the Chamber will work with the City and the State to fully dissolve the District.
UNRESOLVED ISSUES: As noted in the recitals to the agreement, the assessments to be
collected this fall for FY19 may not be sufficient to cover existing outstanding obligations of the
District. Entering into this agreement is a solution for addressing this issue. If the Chamber and
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City fulfill their respective obligations, we are confident no additional action on the part of the
City will be required.
ALTERNATIVES: If the Commission determines to not enter into this agreement, the
winding down of the affairs of the District will fall to City staff.
FISCAL EFFECTS: Pursuant to 7-12-1144, MCA, the obligations of the District are not
obligations of the City. As such, the fiscal impacts to the City are only related to work to assist
the District and the Chamber in dissolving the District and the winding down of its affairs.
Attachments: Agreement for Administration of Bozeman Tourisms Business Improvement
District Dissolution with the Bozeman Area Chamber of Commerce
Report compiled on October 10, 2019
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TBID Dissolution Agreement 1
AGREEMENT FOR ADMINISTRATION OF
BOZEMAN TOURISM BUSINESS IMPROVEMENT DISTRICT DISSOLUTION
Between
City of Bozeman, Montana
and
Bozeman Area Chamber of Commerce
This Agreement for Administration of Bozeman Tourism Business Improvement District
Dissolution (this “Agreement”) made this ______ day of _____________________, 2019,
between the CITY OF BOZEMAN, MONTANA, a municipal corporation and political
subdivision of the State of Montana (the “City”), and BOZEMAN AREA CHAMBER OF
COMMERCE, a Montana nonprofit corporation (“Chamber”), describes the rights, duties,
agreements and obligations of the City and the Chamber in connection with the City’s collection
and remittance of assessments and the Chamber’s administration of the Bozeman Tourism
Business Improvement District (the “BTBID” or “District”) to wind down the affairs of the
District.
RECITALS
WHEREAS, the District was created by Resolution 4182 on July 6, 2009, implemented
by Ordinance 1765 on September 10, 2009; and
WHEREAS, the term of the District is ten (10) years, expiring on September 10, 2019;
and
WHEREAS, in accordance with 7-12-1121, MCA the City created the BTBID Board of
Trustees (the “BTBID Board”) and authorized the Board to exercise powers related to
administration of the BTBID as described in Ordinance 1765; and
WHEREAS, the Director of the BTBID Board is the duly appointed Executive Director
of the Chamber, charged with the general supervision and management of the business affairs of
the BTBID in accordance with its bylaws; and
WHEREAS, in accordance with the BTBID’s work plan and budget approved by the City
Commission on June 25, 2018 the authorized assessments to be collected in October 2019 and
May 2020 in accordance with state law (“FY 2020 collections”) will be applied to pay the
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TBID Dissolution Agreement 2
BTBID’s budgeted expenses incurred during the period from July 1, 2018 through June 30,
2019; and
WHEREAS, pursuant to 7-12-1144, MCA, obligations of the BTBID are not obligations
of the City; and
WHEREAS, on April 23, 2019 the BTBID Board voted to not renew the term of the
BTBID, but instead to allow it to sunset; and
WHEREAS, in a presentation to the Bozeman City Commission on June 17, 2019 the
BTBID Board of Directors informed the City the FY 2020 Collections may be insufficient to pay
the outstanding obligations of the BTBID for the period from July 1, 2018 through June 30,
2019; and
WHEREAS, on May 21, 2019 the Executive Committee of the Chamber agreed to
assume the obligation for payment of liabilities of the BTBID for the benefit of the BTBID
should any liabilities remain outstanding after application of collected assessments as provided
herein; and
WHEREAS, the Bozeman City Commission appreciates the Bozeman Chamber of
Commerce’s willingness to participate in the dissolution of the District’s operations; and
WHEREAS, the Bozeman City Commission acknowledges the substantial contributions
and success of the District’s activities over the past ten years.
NOW THEREFORE, in consideration of the undertakings described in the foregoing
recitals and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the City and the Chamber agree as follows:
1. Debts/Obligations of the District: As of the date of this Agreement, the outstanding
obligations of the District are those as listed on Exhibit A. The Chamber agrees that
pursuant to 7-12-1144, MCA, obligations of the BTBID are not obligations of the
City.
2. City’s obligations. The City agrees:
(i) To amend the City’s FY 2020 budget to appropriate funds to the BTBID
based on estimated revenues to be collected in FY 2020.
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TBID Dissolution Agreement 3
(ii) To take all steps necessary to collect the annual assessments for Fiscal Year
2019 levied by Resolution 4930 dated September 24, 2018 (the “Assessment”)
in accordance with such Resolution.
(iii) To remit the collected Assessment funds to the BTBID for payment of debts
and obligations by the Chamber by December 15, 2019 for amounts collected
on or before November 30, 2019; and by June 15, 2020 for amounts collected
on or before May 31, 2020; and, any following delinquent collections as they
may occur.
(iv) City will not levy an assessment for the July 1, 2019 through September 10,
2019 period.
(v) City will mail notice to properties levied and assessed in FY 2019 informing
them of City’s intent to not levy an assessment for the period of July 1, 2019
through September 10, 2019.
(vi) City will review the final audit report provided by the Chamber on behalf of
the BTBID and will notify the Chamber in writing when the City, in its sole
discretion, accepts the audit report.
3. Chamber’s obligations. The Chamber agrees:
(i) To apply all funds collected by the City and remitted to the BTBID to pay off,
for the benefit of the BTBID, the BTBID’s outstanding obligations as listed
on Exhibit A in accordance with Section 6.7 of the BTBID Bylaws. The
Chamber will promptly return to the City any remitted funds of the District
not necessary to satisfy such obligations. Should any such excess funds exist
the City will segregate such funds and make them available to serve the
purposes as stated in 7-12-1102, MCA. This may include, upon request and
after entering into a grant agreement, possible remittance to a Tourism
Business Improvement District established by Gallatin County to benefit
owners of property who were part of the District.
(ii) Upon final payment of debts and obligations of the BTBID, to file any
necessary documents with the State of Montana to dissolve the BTBID as a
legal entity.
(iii) To undertake any other tasks necessary to effect winding down and
dissolution of the BTBID.
(iv) After winding down of the BTBID is completed, the Chamber will cause to
occur a final audit and provide the City with a final audit report and other
financial statements as requested by the City. The Chamber agrees that it will
make available upon request by the City and at no expense all agreements,
correspondence, and other documentation relating to the BTBID’s liabilities
and the winding down and dissolution of the BTBID. Any such document
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TBID Dissolution Agreement 4
containing information protected from disclosure pursuant to law may be held
by the Bozeman City Attorney’s Office.
Once the City has accepted the BTBID’s final audit report, the Chamber will
promptly provide copies of all financial records of the BTBID related to
assessments and expenditures and any other records considered public
information under the City of Bozeman records retention schedule and Title 7,
Chpt. 6, MCA to the City Clerk for retention.
4. Term. This Agreement and any obligations of the parties hereunder shall expire and
be of no further force and effect upon the City’s determination the Final Audit Report
is acceptable. Upon termination of this Agreement pursuant to the preceding
sentence, all obligations of the parties hereunder will thereupon expire and be of no
force or effect; provided, however, the provisions of Section 5 shall survive
termination of this Agreement.
5. Representations by Chamber.
(i) The person signing this Agreement on behalf of the Chamber represents and
warrants that he is fully authorized to execute this Agreement on behalf of the
Chamber, and that by signing this Agreement the Chamber will be bound by
the terms contained herein.
(ii) The person signing this Agreement on behalf of the Chamber represents and
warrants he is authorized to act on behalf of the BTBID Board for purposes of
winding down the affairs of the BTBID.
6. Indemnity. The Chamber agrees to defend, indemnify and save and hold the City and
its officers, employees, and agents (collectively, the “Indemnified Parties”) harmless
from and against any and all debts and obligations of the District whether shown on
Exhibit A or claimed by any person or entity, and all claims, damages, costs,
expenses, reasonable attorneys’ fees, liabilities, and losses asserted by or on behalf of
any person or entity arising out of or in any way relating to (i) the failure of the
Chamber to comply with the provisions of this Agreement, including, without
limitation, the failure of the Chamber to pay any outstanding obligation of the BTBID
by the date on which payment is due, and (ii) the services or work performed under
any agreement or contract entered into by the BTBID or by the Chamber on behalf of
the BTBID. If a proceeding is brought against any Indemnified Party, the Chamber
shall, at its expense, but only following notice by the Indemnified Party, defend such
proceeding on behalf of the Indemnified Party.
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TBID Dissolution Agreement 5
In the event of an action filed against the City resulting from the City’s performance
under this Agreement, the City may elect to represent itself and incur all costs and
expenses of suit.
Should any Indemnified Party be required to bring an action against the Chamber to
assert its right to defense or indemnification under this Agreement or under one of the
Chamber’s insurance policies, the Indemnified Party shall be entitled to recover
reasonable costs and attorney fees incurred in asserting its right to indemnification or
defense but only if a court of competent jurisdiction determines the Chamber was
obligated to defend the claim(s) or was obligated to indemnify the Indemnified Party
for a claim(s) or any portion(s) thereof.
The Chamber waives any and all claims and recourse against the City or its officers,
agents or employees, including the right of contribution for loss or damage to person
or property arising from, growing out of, or in any way connected with or incident to
the performance of this Agreement except “responsibility for his own fraud, for
willful injury to the person or property of another, or for violation of law, whether
willful or negligent” as per 28-2-702, MCA.
The provisions of this paragraph 5 shall survive termination of this Agreement.
7. Miscellaneous Provisions.
(i) Limitation on Assignment and Amendment. This Agreement and any right or
obligation hereunder shall not be assigned or amended except in writing and
only following the express written consent of the parties. Any attempted
assignment or amendment in contravention of the foregoing sentence shall be
void.
(ii) Further Assurances. Each party agrees to execute and deliver to the other
such documents as may be reasonably required to implement the provisions of
this Agreement.
(iii) No Third Party Beneficiary. This Agreement is for the exclusive benefit of
the parties, does not constitute a third-party beneficiary agreement, and may
not be relied upon or enforced by a third party.
(iv) Severability. If any term or provision of this Agreement shall to any extent be
invalid or unenforceable, the remainder of this Agreement shall not be
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TBID Dissolution Agreement 6
affected thereby, and each term or provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
(v) Counterparts. This Agreement may be executed in any number of
counterparts, which when taken together, shall constitute one and the same
agreement.
(vi) Waiver. The waiver or failure to enforce any provision of this Agreement
shall not operate as a waiver of any future breach of any such provision or any
other provision hereof.
(vii) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Montana and the rules, policies, and
regulations of the City.
(viii) Contacts. The City initially appoints the following person to represent the
City and interact with the Chamber related to administering and implementing
the provisions of this Agreement on behalf of the City:
City Representative: Andrea Surratt, City Manager
121 N. Rouse Ave.
Bozeman, MT 59771
asurratt@bozeman.net
406-582-2306
The Chamber appoints the following person to represent the Chamber and
interact with the City related to administering and implementing the
provisions of this Agreement on behalf of the Chamber:
Chamber Representative: Daryl Schliem, President/CEO
2000 Commerce Way
Bozeman, MT 59715
dschliem@bozemanchamber.com
406-586-05421
END OF DOCUMENT EXCEPT SIGNATURES
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TBID Dissolution Agreement 7
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
authorized representatives, on the day and year first written above.
CITY OF BOZEMAN
__________________________________________________
ANDREA SURRATT
CITY MANAGER
ATTEST:
__________________________________________________
ROBIN CROUGH
CITY CLERK
APPROVED AS TO FORM:
__________________________________________________
GREG SULLIVAN
CITY OF ATTORNEY
BOZEMAN AREA CHAMBER OF COMMERCE
__________________________________________
DARYL SCHLIEM
EXECUTIVE DIRECTOR
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Exhibit A
Obligations of the TBID District
Collection Time Frame July 1, 2017 - June 30, 2018 July 1, 2018 - June 30, 2019
Events 2018-2019 2019
Airlines Seat Guarantee 125,000.00$ 125,000.00$ 2 year agreements
Airlines Marketing Match 100,000.00$ 120,000.00$ 2 year agreements
MSU Concerts / Other Grants 50,000.00$ 150,000.00$
Montana High School Association 85,000.00$ 100,000.00$
IPW 10,000.00$ 5,000.00$
IMEX 10,000.00$ 5,000.00$
VIC 18,000.00$ 17,000.00$
Admin and Lease 78,000.00$ 78,000.00$
NCUR $45,000.00
Sub Total Events 521,000.00$ 600,000.00$
Marketing 600,000.00$ 600,000.00$ Ends
Total Commitment 1,121,000.00$ 1,200,000.00$ 1,086,000.00$ 18-Jun
1,198,596.00$ 19-Jun
Total Expenditure 2,321,000.00$ 2,284,596.00$
LOC Payoff 250,000.00$ Total Revenue
Total Obligation on District 2,571,000.00$ 2,284,596.00$
(286,404.00)$
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Budget Assessment Actual
1,200,000.00$ 1,026,888.00$ 2018
1,121,000.00$ 1,086,000.00$ 2019
1,200,000.00$ 1,198,596.00$ 2020
3,521,000.00$ 3,311,484.00$
(209,516.00)$
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