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This entry was published on 2014-09-22
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Contract for maintenance and operation
Rapid Transit (RAT) CHAPTER 48-A, ARTICLE 5
§ 41. Contract for maintenance and operation. a. If in the opinion of
the board of estimate and the mayor, a contract for the equipment,
maintenance and operation as provided for in the preceding section shall
be inexpedient, impracticable or prejudical to the public interest, the
board of transportation, with the approval of the board of estimate and
the mayor, may equip such road in whole or in part, or purchase power
for operation thereof, for and at the public expense, by contract
therefor subject to the provisions of section seventeen of this chapter,
and enter into a contract with any person, who or which in the opinion
of such board of transportation shall be best qualified to fulfill and
carry out such contract for the maintenance and operation of such road
for a term of not to exceed ten years to be specified in such contract.
The provisions of the foregoing sections in respect of contracts for the
equipment, maintenance and operation of such road shall apply to such
contract for maintenance and operation so far as such provisions are
pertinent and applicable thereto except that the renewal or renewals of
such contract provided for therein shall not exceed ten years in the

b. Every grant or contract made under the provisions of this chapter,
as part of which the city shall have a right to terminate any right or
franchise or any contract for maintenance and operation of any railroad,
shall provide that if at any time in ascertaining the amount to be paid
by the city as a condition of such termination or at the expiration of
the full term, it shall be necessary that a valuation of any plant,
property, equipment, construction or any investment in any thereof,
shall be determined, such valuation shall in default of agreement be
determined by arbitration or by the court. Every such grant or contract
shall also make provision to assure supervision by the board of
transportation of all operations of such grantee or contractor in and
about such enterprise and for keeping and for access to and examination,
use and production of any and all books, records and memoranda of such
operations, not only of the grantee or contractor but of any contractor,
sub-contractor, banker or person furnishing money, material or supplies
directly or indirectly to such enterprise, to the extent that such
books, records and memoranda have to do therewith, and for ascertaining
the cost to the grantee or contractor and the value of any equipment,
property or construction furnished or done pursuant to such grant or
contract, including permanent additions to construction from time to
time and for a method of determining the amount of such cost forthwith
upon the furnishing or completion of the same by arbitration or by the
court in default of an agreement upon the amount thereof. The grant or
contract may provide that if the amounts to be paid to the grantee or
contractor upon any such termination shall not have been finally
determined or paid prior to or at the time when the termination is under
such notice given to take effect the title to and right of possession of
the property, and the right of possession of such railroad may
nevertheless pass to the city or to a new contractor, and that the city
or such new contractor having given proper and sufficient sureties shall
pay to the contractor the amount so determined, with interest from the
time aforesaid.

c. Every grant or contract made under the provisions of this chapter
by the terms of which the city in lieu of rental shall be entitled to a
portion of income or increase derived from the enterprise shall make
provision for definition and determination from time to time of the
items to be included in operating expenses, taxes, payments to reserve
and amortization funds and for the percentages or amounts to be set
aside therefor and for interest upon construction cost. The board of
transportation shall prescribe in the grant or contract a period for
amortization by the grantee or contractor of the actual cost of plant
and property other than equipment, or actual cost to the contractor of
the construction of such road and the period so prescribed shall end
with the term of the grant. Any and all sums of money received by the
city from or under any grant or contract made under the provisions of
the rapid transit act or this chapter, over and above such sum as is
required by law to be paid into a sinking fund to meet the payment of
interest or principal on city bonds issued for construction and
equipment of any railroad pursuant to any such contract, and except any
sum of money that may be contributed toward the construction of any road
by the contractor having the contract for the equipment and operation of
such road, shall be kept separate and apart from any and all other
moneys of such city and paid into a fund to be known as the rapid
transit fund, and shall be applied under the direction of the board of
estimate with the approval of the mayor only to or toward the
construction of railroads, or the purchase of plant and property or
equipment of railroads, pursuant to the provisions of this chapter, or
to deficiencies in the operation or rental of railroads owned by the
city, or in the operation of railroads owned and operated by the city
pursuant to this chapter.

d. Unless otherwise provided by law the board of transportation, with
the approval of the board of estimate and the mayor, shall have and
exercise the powers, rights and privileges reserved or given to the city
to terminate any right, privilege, franchise, authority or contract
granted or entered into, or which may be exercised under the provisions
of this chapter, and may do and perform any and all things requisite and
necessary to any such termination.