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The Building Authority was created by the city and organized as a separate legal entity. The authority is governed by a five-person board appointed for 6-year terms by the mayor, subject to city council approval. The authority uses the proceeds of its tax-exempt bonds to finance the construction or acquisition of general capital assets for the city only. The bonds are secured by the lease agreement with the city and will be retired through lease payments from the city. How should the city report the financial activities of the Building Authority? (I.e., is the entity a component unit of the city-why or why not? If yes, should blending or discrete presentation format be used?)

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