(1) The governing body of a municipality is hereby vested with jurisdiction, power, and authority to establish districts within the municipality in which the improvement is to be acquired, constructed, installed, operated, or maintained or the service is to be provided. The governing body of a municipality may establish a district partially within the boundaries of any other municipality or within the unincorporated territory of a county if such municipality or county consents by resolution to the establishment of such district. No such district may provide the same improvement or service as an existing special district within the territory of such existing special district unless the existing special district consents. (2) If a municipality other than the municipality that established the district annexes or incorporates any territory within an established district, such territory shall remain in the district unless the municipality notifies the district's board of the municipality's intent to exclude the territory annexed or incorporated from the district. If the municipality notifies the board of its intent to exclude such territory, such exclusion shall take effect January 1 of the year following such notice. Any property excluded from the district under this subsection (2) shall remain subject to payment of its share of any indebtedness or bonds that are outstanding on the date of such exclusion.
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