(1) Proceedings for inclusion of an additional county, counties, or a municipality which has territory in two or more counties in a service authority shall be in accordance with the provisions of this section.

(2) (a) Inclusion of any county, counties, or a municipality specified in subsection (1) of this section may be initiated by:

(I) A petition signed by eligible electors in the respective county, counties, or municipality seeking to be included, in number not less than five percent of the votes cast in the county, counties, or municipality for the office of governor at the last preceding general election;

(II) A resolution adopted by the municipality or by a majority of the county commissioners in the county or counties; or

(III) A resolution of a majority of the governing bodies of the municipalities within the territory of the county or counties seeking to be included.

(b) Proceedings for inclusion shall be commenced by filing a verified petition or resolution with the board of directors of the service authority naming the county, counties, or municipality to be included, and shall be accompanied by a deposit of money sufficient to pay all costs of the proceedings as estimated by the board. Additional deposits may be required from time to time should the original deposit be deemed by the board to be insufficient to pay all the costs.

(3) The secretary of the board shall cause notice of a hearing on the petition to be published throughout the county or municipality. The notice shall also be mailed to the governing body of each county and the municipalities within the county, and to any municipality specified in subsection (1) of this section. The notice shall describe the nature of the petition and the purpose, date, time, and place of the hearing.

(4) At the hearing and any continuation thereof, all petitioners and county or municipal officials and any eligible elector of the service authority or of the territory proposed for inclusion shall be interested parties and may present evidence for or against the petition.

(5) Upon completion of the hearing, the board shall make the following determinations which shall be final, conclusive, and not subject to review except upon the grounds that the same are arbitrary or capricious:

(a) Whether the petition or resolution and all subsequent notices and proceedings comply with all of the requirements of this section;

(b) Whether the petition has been signed by the requisite number of eligible electors or whether the resolution was approved by the requisite number of the members of the board of county commissioners or members of the governing body or bodies of municipalities within the county having the proper qualifications; and

(c) Whether the granting of the petition or resolution, in whole or in part, is in the public interest and the interest of the service authority.

(6) Having made such determinations, the board by resolution shall grant or deny the petition or resolution, in whole or in part, as follows:

(a) If any of the determinations required by subsection (5) of this section are in the negative, the board shall deny the petition or resolution.

(b) If all of the determinations required by subsection (5) of this section are in the affirmative, the board shall order the question of including said county, counties, or municipality within the service authority to be submitted at a general or special county or municipal election, as the case may be, to a vote of the eligible electors of the county, counties, or municipality. The resolution shall name a designated election official who shall be responsible for the conducting of the election. The election shall be held and conducted as provided in articles 1 to 13 of title 1, C.R.S. If the inclusion is approved at the election, the board shall, by resolution, grant the petition, in whole or in part as the case may be, and shall file a true and correct copy of its resolution with the clerk of the district court which had jurisdiction over the initial formation of the service authority and with the board of county commissioners and assessor of the county and the division of local government in the department of local affairs.

(7) The district court or the director of the division of local government shall enter an order of inclusion of the county or municipality, as the case may be, in the service authority, which order shall finally and conclusively establish such inclusion against all persons except the state of Colorado, in an action in the nature of quo warranto, commenced by the attorney general within thirty-five days after the adoption of the resolution and not otherwise. The inclusion of the county in the service authority shall not be directly or collaterally questioned in any suit, action, or proceeding except as expressly authorized in this section.