(1) Any 25 residents of a city and of the area within 10 miles from the territorial boundaries thereof may file a petition with the city clerk setting forth that there is a need for an authority to function in the city and said surrounding area.
(2) Upon the filing of such a petition, the city clerk shall give notice of the time, place, and purpose of a public hearing at which the council will determine the need for an authority in the city and said surrounding area.