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the monthly payment to the Contractor. The City's decision to reduce or eliminate services shall <br />be effective 30 days after written notice of such election has been sent to Contractor at the <br />address set forth in Section 9, below. <br />2. COMPENSATION <br />a. City agrees to pay, and Contractor agrees to accept as total payment for its services, <br />the rates and charges identified in Exhibit 8. The total sum to be expended under this Agreement <br />shall not exceed $504,264.72, annually, during the term of this Agreement. This amount includes <br />$90,000 for as needed services performed only at the City's written request. <br />b. Payment by City shall be made within thirty (30) days following receipt of proper <br />invoice, subject to City accounting procedures. Payment need not be made for work which fails <br />to meet the standards of performance set forth in the Recitals which may reasonably be expected <br />by City. <br />3. TERM <br />This Agreement shall commence on June 1, 2011 and terminate on May 31, 2013 unless <br />terminated earlier in accordance with Section 12, below. The term of this Agreement may be <br />extended for three successive twelve month periods upon a writing executed by the City <br />Manager and the City Attorney. In the event the City Council does not budget sufficient funds to <br />continue services for a new fiscal year, the City shall notify Contractor of such occurrence and <br />shall terminate this Agreement on the last day of the fiscal period without penalty to City. <br />4. INDEPENDENT CONTRACTOR <br />Contractor shall, during the entire term of this Agreement, be construed to be an <br />independent contractor and not an employee of the City. This Agreement is not intended nor <br />shall it be construed to create an employer-employee relationship, ajoint venture relationship, or <br />to allow the City to exercise discretion or control over the professional manner in which <br />Contractor performs the services which are the subject matter of this Agreement; however, the <br />services to be provided by Contractor shall be provided in a manner consistent with all <br />applicable standards and regulations governing such services. Contractor shall pay all salaries and <br />wages, employer's social security taxes, unemployment insurance and similar taxes relating to <br />employees and shall be responsible for all applicable withholding taxes. <br />5. INSURANCE <br />Prior to undertaking performance of work under this Agreement, Contractor shall maintain and <br />shall require its subcontractors, if any, to obtain and maintain insurance as described below: <br />a. Commercial General Liability Insurance. Contractor shall maintain commercial <br />general liability insurance which shall include, but not be limited to protection against claims <br />arising from bodily and personal injury, including death resulting therefrom and damage to <br />property, resulting from any act or occurrence arising out of Contractor's operations in the <br />performance of this Agreement, including, without limitation, acts involving vehicles. The <br />