(1) Contracting. The board may contract with any other boards of trustees of free public libraries, any other city, school corporation, private or semi-private organization, institution of higher learning, township, or county, or with the trustees of any county library district for the use of the library by their respective residents.

(2) Termination. Such a contract may be terminated at any time by mutual consent of the contracting parties. It also may be terminated by a majority vote of the electors represented by either of the contracting parties. Such a termination proposition shall be submitted to the electors by the governing body of a contracting party on a written petition of not less than five percent in number of the electors who voted for governor in the territory of the contracting party at the last general election. The petition must be presented to the governing body not less than 40 days before the election. The proposition may be submitted at any election provided by law that is held in the territory of the party who is seeking to terminate the contract.