This subchapter applies only to:
(1) a municipality that has:
(A) a population of more than 275,000; and
(B) a municipal water and sewer system operated by a water board; and
(2) a water control and improvement district that:
(A) is located in whole or in part within the boundaries of a municipality described by Subdivision (1); and
(B) owns district property that is operated, under a contract between a municipality described by Subdivision (1) and the district, by a water board established by the charter of the municipality or by ordinance.