2. Operating Agreement - Tourism Business Improvement District and the Kalispell Chamber of CommerceCharles A.Harbal
City Attorney
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%'.Aty of Kalispen
Office of City Attorney
201 First Avenue East
P.O. Box 1997
Kalispell, MT 59903-1947
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TO* Mayor Taarn xni Fisher
and Kalispell City Council
FROM: Charles Harball, City Attorney
Jane I--Iowington, City Manager
Tel 406.758.7709
Fax 406.758.7771.
charball @kalispell.com
T: Motion to Approve the Form of Agreement between the Kalispell
TBID and the Kalispell Chamber of Commerce
MEETINGDATE: February 22, 2011-- regular Council Meeting
BACKGROUND: Last year at about this time the City Council approved the formation of the
Kalispell Tourism Business Improvement District. As it was explained to Council at that time it
is necessary for such a district to be directed by a statutorily authorized tourist bureau, which in
this region is the Kalispell Chamber of Commerce. For this purpose the two entities have
entered into an operating agreement that sets forth the rights and responsibilities of each.
Although the City is not a necessary party to the agreement, it is interested that the agreement
properly addresses issues of insurance, indemnification and accounting. The form of agreement
that is before the Council adequately addresses these issues from the City's perspective.
E o .ATION: That City Council give consideration to and approve the agreement
as to its form..
Respectfully submitted,
may.,
. .......... . ... .... .............. ........
Charles Harball City Attorney Jane Howington, City MaAager
Kalispell Tourism Business Improvement District Board of Directors
and
Kalispell Chamber of Commerce
Operating Agreement
THIS AGREEMENT ("Agreement") is made this 10th day May, 2010, by and
between the Kalispell Chamber of Commerce, a 501 (c)(6) non-profit corporation, with its
principal place of business at 15 Depot Park, Kalispell, Montana, ("Chamber/CVB"), and
the Kalispell Tourism Business Improvement District Board of Directors, a division of the
City of Kalispell, with its principal place of business at 15 Depot Park, Kalispell, Montana
("TBID"). The Chamber and the TBID are collectively referred to as the "Parties" and
individually at the "Party".
WHEREAS, on May 3, 2010, the City of Kalispell, by Resolution 5425, created a
Tourism Business Improvement District for a 10-year duration, effective May 3, 2010,
and;
WHEREAS, the mission of the TBID is to promote and market Kalispell, Montana
and to promote tourism, conventions, trade shows, and generate room nights for lodging
facilities in Kalispell by effectively marketing our region as a preferred travel destination,
and;
WHEREAS, the mission of the Chamber is to develop a strong business climate
and vibrant economy by serving the community in a leadership role thereby enhancing
the quality of life, and;
WHEREAS, the Chamber and TBID have common goals and interests in the
promotion, marketing, and selling of visitor overnights and such goals and interests are
in furtherance of the purposes of both Parties, and;
WHEREAS, the State of Montana has mandated that the director of a tourism
business improvement district must be the executive director of the existing convention
and visitor bureau, when one exists, and the Chamber has served as that designated
entity by the city of Kalispell since 1987, and;
WHEREAS, given their common interests and their mutual desire to maximize
opportunities available to therm and to minimize administrative expenses, the Parties
wish to enter into this Agreement, by which the Chamber will provide the TBID with
certain staffing, office space, office equipment, office furniture, office supplies, office
services, and other administrative support, and by which the Chamber may license, and
TBID may accept certain intellectual property;
Now THEREFORE, in consideration of the premises set forth above and the
promises set forth below, the sufficiency and receipt of which are hereby acknowledged,
the Parties hereby agrees as follows:
1. Term and Termination
A. Term. This agreement shall be effective as of May 3, 2010 and shall remain in
full force and effect until June 30, 2020, or as long as the tourism business
improvement district created by the City of Kalispell pursuant to Resolution 5425
is in effect, unless terminated earlier pursuant to this Agreement.
B. Termination without cause. Either Party may terminate this Agreement, without
cause, by giving written notice to the other Party stating when, but not less than
ninety (90) days thereafter, such termination shall be effective.
C. Termination for Cause. Either Party may terminate this Agreement, for cause, if
either Party notifies the other Party of a material breach of any provision of the
Agreement. The breaching Party shall have thirty (30) days following notice to
cure the breach. The notice shall specify the alleged breach and the date on
which termination will be effective unless such breach is cured to the satisfaction
of the non -breaching Party within the time period allowed.
D. Termination for other Reasons.
1. Either Party may terminate this Agreement upon thirty (30) days notice to the
other if at any time:
a. The city of Kalispell does not approve an annual work plan or budget for
the tourism business improvement district that permits continuation of this
Agreement as determined in their reasonable discretion of the TBID.
b. Either Party determines that its continued relationship with the other Party
will threaten any relevant tax exemption that either Party now possesses
or shall possess in the future.
2. This Agreement shall terminate automatically upon termination of the tourism
business improvement district created by the City of Kalispell pursuant to
Resolution 5425.
3. This Agreement may be terminated at any time by mutual written agreement
❑f the Parties.
IL Board Responsibilities and Relationshi
The Board of Directors of each Party shall retain all governing authority of that
respective Party placed in it by law and its bylaws. The Board of Directors of each Party
shall represent that Party in matters relating to this Agreement and interpretation. Each
Party shall appoint a non -voting member from its Board of Directors to serve in an ex-
officio capacity on the other Party's Board to provide regular reports and
communications.
III. Services
During the term of this Agreement, TBID engages Chamber/CVB to provide the
services and functions described in this Agreement, and the Chamber/CVB agrees to
provide such services and functions, under the terms set forth herein. The services and
functions are as follows:
A. Offices Space, Furniture Supplies, and Services
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1 . office Space. ChamberlCVB shall provide TBID with office space, at the
TBID's cost, within the Chamber/CVB's premises, currently located at 15
Depot Park, Kalispell, Montana.
2. Furniture Fixtures and Equip n-ent. ChamberlCVB shall provide TBID
with the use of office equipment, office furniture, office supplies, office
services, and other administrative support as is currently offered.
3. Payment for Specific Items. If the Parties agree that specific additional
equipment, furniture, supplies or services are needed solely for the use of
the TBID, the cost of the same will be borne by the TBID. If the Parties
determine that specific additional equipment, furniture, supplies or
services are needed for the mutual shared use of the Parties, the Parties
shall determine a reasonable basis to share the cost.
B. Professional Services and Staffin
1 . President/CEO. The President/CEO of the ChamberlCVB shall act as the
Executive Director of the TBID without charge to the TBID. The
President/CEO shall report to the TBID Board of Directors and shall serve
as the Director of the TBID funds as required by State statute (Montana
Code Annotated-2007, 7-12- 121). The President/CEO shall have
supervisory authority and responsibility for all staff of the ChamberlCVB,
and shall have sole discretion to hire, fire, evaluate and assign duties to
employees. The President/CEO will be evaluated by the ChamberlCVB
Board. The TBID may have a representative serve on the selection
committee for TBID program manager positions.
2. Em to ee Services. ChamberlCVB shall employ professionals who shall
provide services to the TBID. These employees shall report to the
ChamberlCVB President/CEO. TBID shall reimburse ChamberlCVB for
all costs and expenses related to recruiting, hiring, and training
employees including all costs related to salary, benefits and other
compensation as may be adjusted from time to time. These employees
shall be subject to the employment policies of the Chamber/CVB and
shall be subject to its oversight and supervision. The ChamberlCVB shall
have the authority to hire, discipline and discharge its employees.
3. Financial Administration. The ChamberlCVB shall establish and
administer accounting procedures, systems, and controls in accordance
with generally accepted accounting principles in order to develop, prepare
and safe Keep the financial records and books of account for the business
and financial affairs of the TBID. The ChamberlCVB shall prepare and
provide regular financial statements for the review and use of the Board
of Directors of the TBID at its regular Board meetings.
a. Disbursements. TBID disbursements shall be made in
accordance with the bylaws of the TBID. The President/CEO
shall assist in development of its annual report and workplan
to present for annual approval by the City of Kalispell.
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b. Agency Fund. The ChamberlCVB is acting as an agent of the
City of Kalispell for the administration of TBID funds. The City
will collect assessed funds quarterly from hoteliers within the
district. Disbursements will be made quarterly from the City
into a restricted account of the Chamber/CVB. The
ChamberlCVB will provide accounting, tax, and audit services,
and liability insurance according to the standards established
by the City for Agency Funds. Such costs will be paid from, or
reimbursed by, TBID funds.
IV. Intellectual and Physical Property
A. Name and Logo. Each Party shall retain ownership and use of its own
registered name, logo, and any trademarks or service marks.
B. Confidential Information and Intellectual Pro ert . During the term of this
Agreement, the Parties anticipate that certain information and intellectual
property will be developed for the purposes of the ChamberlCVB and the
TBID's mission and activities. said confidential information and intellectual
property includes, but is not limited to, databases, lists, customer lists, visitor
guides and publications, financial and proprietary information, concepts,
documents, materials, trade secrets, business contacts, and ideas about
current and future projects which the ChamberlCVB or TBID regards as
confidential. All such confidential information developed pursuant to the
services provided under this Agreement shall be owned jointly by the
ChamberlCVB and the TBID.
C. Physical Property. Physical property solely with TBID funds will be owned by
the TBID. Property purchased jointly by the ChamberlCVB and TBID will be
owned jointly by the ChamberlCVB and the TBID and will be distributed
equitably upon any separation of the Parties
V. Insurance
A. TBID Insurance. The ChamberlCVB, as an agent of the City, shall
maintain a policy or policies of comprehensive general liability insurance
coverage which will include activities of the TBID and name the City as
additionally insured in an amount sufficient for such purposes by the City
of Kalispell, as required by 7-1 2- 1 43 MCA.
B. Proof of Coverage, Proof of the foregoing insurance coverage, as
applicable, shall be provided by the ChamberlCVB to the City at the
commencement of this Agreement, and annually upon renewal of
coverage.
V1. Indemnification
Each Party hereby agrees to indemnify, save and hold harmless the other Party
and the other Party Is subsidiaries, affiliates, related entities, partners, agents, directors,
employees, attorneys, heirs, successors, and assigns, and each other from and against
all claims, actions, demands, losses, damages, judgments, settlements, costs and
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expenses (including reasonable attorney's fees and expenses), and liabilities of every
kind and character whatsoever, which may arise by reason of: 1) any act or omission
constituting a breach or default under this Agreement by the party or any of its officers,
directors, employees, or agents in their capacity as officers, directors, employees, or
agents of the Party; and/or 2} the inaccuracy or breach of any of the representations or
warranties made by the Party under this Agreement. The indemnity under this Section
shall require the payment of costs and expenses by the liable Party as they are incurred.
The Party seeking reimbursement or indemnity under this Section shall promptly notify
the liable (other) Party upon receipt of any claim or legal action referenced in this
Section. The indemnified Party shall not at any time admit liability or otherwise attempt
to settle or compromise said claim, action or demand, except upon the express prior
written instruction or agreement of the indemnifying Party or upon the repudiation or
denial of the indemnification by the indemnifying Party. For the purposes of this Section,
a repudiation or denial of indemnification shall be deemed to occur if the Party seeking
indemnification does not receive written confirmation of indemnification from the other
Party from whoa the indemnification is sought within thirty (30) calendar days of notice
of the claim, action or demand by the Party seeking indemnification. The Party seeking
indemnification shall make all reasonable efforts to provide the Party from whom
reimbursement is sought with all information that may be useful in determining whether
indemnification is proper. The provisions of this Section shall survive any termination or
expiration of this Agreement.
VII. Relationship of Parties
In the performance of the services to be provided pursuant to this Agreement, the
Parties understand and agree that the Chamber/CVB and any of its employees or
agents shall be, and at all times are, acting as agents of the TBID. No Party shall have
the power to bind or obligate the other except as specifically provided in this Agreement.
VIII. Notices
Any notices required hereunder shall be in writing and shall be deemed to have
been duly given when hand delivered or when deposited in the United State mail, if
mailed by certified or registered mail, return receipt requested, postage prepaid, or sent
by federal express or other courier service and addressed to the person(s) at the
address set forth at the end of this Agreement or such other person and/or address of
which the receiving party has given notice pursuant to this Section. All notices shall be
considered given and received on the date appearing on the return receipt thereof, or on
the delivery date appearing on the records of federal express or other courier service.
lx. General Provisions
A. Legal --Capacity. The Parties each warrant to the other that it has the legal
capacity to enter into this Agreement, that the execution has been duly approved
by its Board of Directors and that its obligations under the Agreement do not
violate its organizational documents, bylaws, or any agreement to which it is
party.
B. Non -Assumption of Liabilit . Except as specifically set forth herein,
Chamber/CVB shall not, by entering into and performing this Agreement, become
liable for any of the existing or future obligations, liabilities, or debts or TBID
under this Agreement. TBI D shall not, by entering into and performing this
Agreement, become liable for any of the future obligations, liabilities, or debts of
Chamber/CVB.
C. Amendments. No amendments or additions to this Agreement shall be
binding unless executed in writing and signed by the Parties
D. Governinq Law. This Agreement shall be governed by and constructed
according to the lags of and subject exclusively to the jurisdiction of the courts of
the State of Montana. Venue for any action under this Agreement shall be in
Flathead county, Montana.
E. waiver of Breach. No waiver of any breach of any provision or condition
of this Agreement, whether by course or dealing or otherwise, shall be effective
unless evidenced by any instrument in writing duly executed by the party against
whom such enforcement or waiver is sought. Waiver of breach of any term or
provision of this Agreement shall not be deemed a waiver of any other breach of
the same or a difference provision.
F. Severability. In the event any term or provision of this Agreement is
rendered invalid or unenforceable by any valid legislative or regulatory act or
declared null and void by any court of competent jurisdiction, the remaining
provisions of this Agreement shall remain in full force and effect.
G. Headings. The paragraph headings contained in this Agreement are for
reference purposes only and should not affect in any way the meaning or
interpretation of this Agreement.
H. Prior A reements. This Agreement constitutes the complete Agreement
of the Parties, and shall supersede and render null and void all prior and
contemporaneous agreements between the Parties regarding the subject smatter
hereof.
I. Assignment. Neither Party may assign its rights duties or obligations
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under this Agreement without the prior written consent of the other Party, which
consent may be withheld in the sole discretion of a Party. This Agreement shall
be binding upon and inure to the benefit of permitted assignees.
J. Attorney',s Fees. If any legal proceeding is commenced which is related
to this Agreement, the losing Party shall pay the prevailing Party's actual
attorney's fees and expenses incurred in the preparation for, conduct of or
appeal or enforcement of judgment from the proceeding.
K. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original for all purposes and all of which taken
together, shall constitute one and the same instrument.
IN WITNESS HEREOF, the parties hereto have executed this Agreement on this
loth day of May, 2010.
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KALISPELL TOURISM BUSINESS IMPROVEMENT DISTRICT
BOARD OF DIRECTORS
By:
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KALISPELL CHAMBER OF COMMERCE AND
CONVENTION AND VISITOR BUREAU
CITY OF KALISPELL
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Its:
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