A City Established an Airport Authority as a Municipal Corporation

A city established an airport authority as a municipal corporation under state law for the purpose of acquiring, maintaining, operating, and financing airports. The authority's governing board consists of five members--four appointed by the mayor of the city and one appointed by the board of county commissioners. The board members may not be removed by the appointing officials, except for cause through an impeachment process.
The authority is authorized to issue bonds, to levy taxes, to own property in its own name, to determine its budget, and to establish rates. All debt issued is payable from revenues derived solely from the operation of the authority. The city has no obligation for the debt of the authority. The authority's board controls the day-to-day operations of the organization. The authority has sole responsibility for financing its deficits and has sole control of its surplus funds.
Should the city include the authority in its financial statements as a component unit? How, if at all, should it report the authority? Explain and justify citing the specific criteria that you used to make your determination.