The court must render a judgment decreeing the dissolution of a municipality if:
(1) The referee reports that:
(a) At the time the petition for dissolution is filed, the population of the municipality is less than two hundred fifty; and
(b) The petition has been executed by property owners owning more than one-half of the real property within the municipality, both in area and in assessed valuation; and
(2) The court determines it is in the best interests of the municipality and the property owners that the municipality be dissolved.