N.Y. Rapid Transit Law § 37: Municipal operation; revenue and accounts; operating and other funds

§ 37. Municipal operation; revenue and accounts; operating and other

funds. a. The aggregate amount of the gross receipts of moneys derived

directly or indirectly from or in connection with the operation by the

city of any road shall be known as the revenue thereof. Such revenue

shall be derived from fares to be charged persons riding thereon; from

rates to be charged for carrying property thereon; from rentals or fees

to be charged for concessions or privileges thereon in connection

therewith; from the sale of surplus power, and any other receipts from

whatever source derived.

b. The board of transportation shall establish and maintain a system

of accounts to show at all times the cost of the several classes of

property used in operation and the sources of funds used in the

acquisition of such property; the several classes of operating revenue

and other income; maintenance expenses; interest, amortization,

depreciation and all other charges against earnings. Such accounts shall

be kept in accordance with the uniform system of accounts prescribed for

railroads by the public service commission or other duly constituted

authority and published in the City Record.

c. The revenue derived from all sources of income of any such road

shall be deposited daily by the board in the name of the city in banks

to be designated by the board of transportation and shall be held

separate and apart from all other funds of the city as the operating

fund for the payment therefrom of the expenses of operation, maintenance

and repairs, and depreciation, interest and amortization charges. An

accurate report of all moneys received shall be made daily to the

comptroller of the city, who shall have power and whose duty it shall be

to audit currently all the financial details of municipal operation,

which audit shall not preclude examination of such account by any other

properly constituted authority. An itemized report of the result of such

municipal operation shall be filed each month by the board of

transportation with the mayor and the board of estimate.

d. From the operating fund thus derived there shall be deducted the

following charges in the order named and a separate accounting be made

of each:

1. Operating expenses, exclusive of maintenance, including all

expenses for personal service, materials and supplies used in operation.

2. Expense of maintenance and repairs of structures and equipment,

which shall be the actual cost of keeping the structures and equipment

in thoroughly good order and repair, and shall include the replacement

of parts of construction and parts of equipment units, but shall not

include the renewal or replacement of any complete units of property, as

such units are defined and specified from time to time by the board of

transportation for renewal or replacement from the capital reserve fund.

3. The amount of interest actually payable by the city and the

proportionate annual contributions to sinking fund or other funds to

amortize and retire the bonds, corporate stock or other evidence of

indebtedness issued by the city on account of any road.

4. Contributions to a depreciation fund for replacement or renewal of

worn-out, obsolete or inadequate units of structures or equipment, of

the amount the board of transportation shall determine is the estimated

net loss of value, after maintenance has been applied, of such complete

units of property, with due provision for obsolescence or inadequacy of

such units.

e. The deduction for expenses of operation and maintenance shall be

made currently as required, and the deductions for depreciation,

interest and amortization installments shall be made after the close of

operations each month and shall be the monthly proportion of the annual

amount required for such purposes.

f. In addition to the principal operating fund in which all the

revenue shall be deposited as above provided, there shall be established

and maintained in the custody of the comptroller a separate fund and

bank account, to be designated as the capital reserve fund, to which

shall actually be transferred the amounts deducted from revenue on

account of interest, amortization and depreciation. Any surplus or

balance which shall accrue from the revenue at the end of the fiscal

year, in excess of an amount equal to the average cost of operation and

maintenance for one month during such fiscal year, shall also be paid

into such capital reserve fund. Such fund shall be available for

disbursement in the same manner as the principal operating fund for the

following purposes in the order specified:

1. Interest payable by the city on account of bonds or other evidences

of indebtedness issued, and contributions to sinking funds established

for the retirement thereof;

2. Amounts necessary for renewals or replacements on account of

depreciation and obsolescence.

Any surplus accruing in the capital reserve fund over and above the

amounts disbursed for the purposes specified shall be retained in such

fund and may be expended only for the support, installation or extension

of such transportation facilities. All interest earnings of such fund

shall be added to the fund. The comptroller shall make all payments out

of the capital reserve fund, and shall report quarterly to the board of

estimate the condition of the fund, itemized as to the amount on hand

for interest, amortization of bonds or other evidences of indebtedness,

depreciation and surplus, and shall keep the account of the fund so

subdivided.

g. Payments or withdrawals of moneys from the operating fund and the

capital reserve fund shall be made by checks drawn and signed by the

comptroller upon vouchers certified by a member or an officer of the

board of transportation, duly authorized by resolution of such board,

except that payments of interest, contributions to sinking funds and on

account of retirement of bonds or other evidences of indebtedness shall

be made by the comptroller upon his own initiative as such payments

become due and payable, but a memorandum of such payments shall be

transmitted by the comptroller to the board of transportation for entry

in the accounts thereof. The comptroller from time to time shall inform

the board of transportation in writing as to the amount to be

periodically deducted from revenue on account of interest and

amortization requirements, and the monthly charges and vouchers for such

amounts shall be made in accordance with such devices.