paid to the city for the use of any such branches, extensions 27-3 or additional lines. The city may enter into a contract for the equipment, maintenance and operation of any such road or roads before contracts for construction of such road or roads or any portion or portions thereof shall have been made, and in such case the contract may provide that the city may construct or complete such road or roads or additions thereto or betterments thereof from time to time. at the expense of the city or partly at the expense of the city and partly at the cost or through contribution of the contractor as aforesaid in such proportion as may be agreed upon between the city and the contractor. Such contract for the equipment, maintenance and operation of such road or roads or any portion or portions thereof may be made and entered into as in this act provided before the consents shall have been obtained for any such road or roads or for any portion or portions thereof as provided in section five of this act, and before the detailed plans and specifications shall have been prepared as provided in section six of this act, provided, however, that in such case such contract for equipment, maintenance and operation of such road or roads or any portion or portions thereof shall be upon condition that such contract shall not become operative or go into effect as to such road or roads or such portion or portions thereof unless and until the city shall acquire the right to construct such road or roads or portion or portions thereof by obtaining such consents. The public service commission may in any contract reserve the right, upon conditions and for compensation to the contractor, as provided in the contract, to permit other persons, firms and corporations and the municipality itself to use the tracks, structure and line equipment of the railroad, or any portions thereof.

4. Every such contract shall further provide that the person, firm or corporation so contracting to equip, maintain and operate said road shall annually or at specified intervals pay into the treasury of said city, such rental for the use of said road, as shall be prescribed therein. The

27-4 rental may be either a specified sum of money or a speci

fied part or proportion of income, earnings or profits of
such road, or both a sum of money and a part or propor-
tion of income, earnings or profits, as the said commission
shall deem best suited to the public interest and the board of
estimate and apportionment or other analogous local author-
ity of such city shall approve. Every such contract may
further provide that the amount and character of such
rental may be readjusted at the expiration of a prescribed
period of not more than twenty years, and be readjusted
from time to time in the future at intervals each of not
more than twenty years, and may prescribe a method of
determining by arbitration or by the court of the amount to
be paid upon any readjustment thereof. If such contract
be made with a person, firm or corporation owning or actu-
ally operating or agreeing to operate a railroad or rail-
roads wholly or in part within the limits of the city and
shall make provision for the equipment, maintenance and
operation of such road or roads of the city in connection
with such railroad or railroads and for a single fare, the
contract may provide that the gross receipts from the
operation of such railroad
railroad or railroads within the
limits of the city and from the operation of such
road or roads of the city may be combined during
the term of such contract and that the city shall re-
ceive for the use of the said road or roads at in-
tervals named a specified part or proportion of the income,
earnings or profits of the railroads whose receipts are so
combined and the contract may, in such case, apportion
out of the amount so to be received by the city and specify
a portion thereof which shall be deemed to be the rental
for the use of each of the roads of the city maintained,
equipped and operated under such contract. In any such
case the contract shall provide for determining the amount
of the income, earnings or profits of the railroads whose
gross earnings are so combined, and may authorize the re-
tention, prior to the payment of any sums to the city for

or on account of the city's investment in the construction 27-4 of such road or roads or for the use of the same, of (a) a specified sum of money, which may represent the average annual income from operation of said railroad or railroads theretofore constructed during a period specified in such contract; (b) a sum not exceeding six per centum per annum for each year upon the investment of the contractor, including brokerage charges not exceeding three per centum, in the construction and equipment of the said road or roads of the city to be maintained and operated under such contract, and in the construction and equipment of extensions of any railroads and tracks not owned by the city thereafter constructed and to be operated under such contract; and (c) a sum not exceeding the annual expense or cost to the contractor, plus one per centum per annum, on account of the contractor's investment in betterments or improvements upon, or additions to such road or roads of the city, and upon or to any railroads not owned by the city and operated under such contract, and upon or to the equipment thereof. Such contract may also provide that such payments shall be cumulative, and that any deficiency with respect thereto shall be paid off and discharged annually out of the said gross receipts before any payments by way of rental or compensation for the use of such roads shall be made to the city. The contract may provide for a readjustment at specified intervals of the part or proportion of the said income, earnings or profits of the railroads, which the city shall receive, or of the portion of the amount received by the city which shall be deemed to be the rental of each such road owned by the city, and may prescribe a method of determining by arbitration or by the court the amount which the city shall receive as its part or proportion of such income, earnings or profits or as such rental upon any such readjustment thereof.

5. Such rental and the term for the operation of the railroad included in any such contract shall begin, as to said road, or any section thereof, at such time or times as may

27-5 be provided in the contract. The aforesaid rental shall be paid at such times during each year or at such intervals as said commission shall require. If a contract to equip, maintain and operate such road be made with the person, firm or corporation having or to have the contract to construct the same and such contract shall provide that said road shall be constructed wholly or in part at the cost of the said person, firm or corporation, the said road, however, to be the property of the city in the same manner and to the same extent as if constructed wholly with public money, then the contract may provide as an alternative in lieu of the rental above provided for that any and all income and increase derived by the contractor or on his behalf in any manner from the enterprise of constructing, equipping, maintaining and operating such road, shall after deducting operating expenses, taxes, payments to reserve and amortization funds as provided for in the contract, and not exceeding six per centum interest per annum payable quarterly upon the actual cost to the contractor of construction and equipment of such road, be divided share and share alike between the contractor and the city. The rental and any sums payable under such contract, except any sum or sums of money that may be contributed toward the construction of any road or roads by the contractor having the contract for the equipment and operation of such road or roads, shall be applied first to the payment of the interest upon bonds issued by said city for the construction and equipment of said road as hereinafter provided for, as the same shall accrue and fall due, and the remainder of said rental and moneys not required for the payment of said interest shall be kept separate and apart from any and all other moneys of such city and shall be securely invested and, with the annual accretions of interest thereon, shall constitute a sinking fund for the payment and redemption at maturity of the bonds issued as aforesaid; said rental, moneys and accumulations of said fund over and above so much as may be required for payment of interest and principal of said bonds as aforesaid, shall be paid into the rapid transit fund herein

after provided for.

6. Any such contract may also provide for a renewal or renewals not to exceed twenty years in the aggregate of the lease of said road upon the expiration of an original term of not more than twenty years upon such terms and conditions, to be approved by the board of estimate and apportionment, or other analogous local authority of such city, as to said commission may seem just and proper, and may also contain provisions for the valuation of the whole or a part of the property of said contracting person, firm or corporation, employed in and about the equipment, maintenance and operation of said road, and for the purchase of the same by the city, at such valuation, or a percentage of the same, should said lease not be so renewed at any time, or should the same be terminated or expire as aforesaid. Such contract shall also state the date on which the operation of the road, or any section thereof, shall commence.

7. In case the title to the equipment of said road shall not be vested in the city, the city in and for which said road shall be constructed shall also have a first lien upon the rolling stock and other property of said contracting person, firm or corporation, constituting the equipment of said road and used or intended for use in the maintenance and operation of the same, as further security for the faithful performance by such contracting person, firm or corporation of the convenant, conditions and agreements of said contract, on his, their, or its part to be fulfilled and performed, and in case of the breach of any such covenant, condition and agreement said lien shall be subject to foreclosure by action, at the suit of such city, in the same manner, as far as may be, as is then provided by law in the case of foreclosure by action of mortgages on real estate. The commission may, however, from time to time, relieve from such lien, any of the property to which the same may attach, upon receiving additional security, which may be deemed by said commission to be the equivalent of that which it is proposed to release and otherwise upon such terms as to such commission shall seem just.

27-6