If, subsequent to the approval of an application of intention, but prior to circulating the formation petition, a valid petition is filed with, or a resolution is adopted by, the governing body of a city, the corporate area of which is included in a metropolitan water district organized under the Metropolitan Water District Act, to initiate formal proceedings for the annexation to the city of territory within the proposed municipal water district, in a manner which would result in automatic annexation to the metropolitan water district of the territory annexed to the city, the proponents of the formation of the municipal water district may omit from the proposed municipal water district all territory included in the petition or resolution for annexation. If such territory is omitted, no part of the city shall be included within the proposed municipal water district.