(1) Whenever the last federal census shows that any city of the first class has less than five thousand (5,000) inhabitants, the city may be reduced to a city of the second class upon the adoption of a resolution by the council of the municipal corporation requesting that the grade of the municipal corporation be reduced.
(2) The Board of Municipal Corporations, upon the receipt of a certified copy of the resolution, shall make an order reducing the grade of the municipal corporation, and, upon being advised of the action of the board, the Governor shall cause a statement thereof to be prepared and transmitted to the mayor of the city stating the grade to which the municipal corporation has been reduced.