The County Transit Authority (CTA) was established by the County to construct, operate, and maintain the County’s mass-transit train system. The CTA was created by the County as a separate legal entity, with powers to issue revenue bonds payable from railway fees and other revenues.

The 9-member governing body of the CTA consists of six members appointed by the mayor for fixed 10-year terms, and three County officials serving ex officio – the elected County treasurer, the elected County comptroller, and the appointed superintendent of transportation.

The CTA is financially self-sufficient, and it sets its own rates and approves its own budget. The County cannot access its assets or surpluses, nor is it obligated to subsidize deficits of the CTA.

The CTA has issued bonds to help fund recent construction and renovation projects. The related bond agreement states that the debt of the CTA is not an obligation of the County. However, County statutes authorize the County’s budget director to include in the budget submitted to the County Board of Supervisors an amount sufficient to make the principal and interest payments on the CTA bonds, in the event CTA revenues are insufficient to meet debt sevice requirements.

Is the CTA a component unit of the County?

If so, how should the County present the financial activities of the CTA in its Comprehensive Annual Financial Report (CAFR)? Specifically address both the government-wide and the fund basis financial statement presentation considerations.