Drainage districts organized or incorporated under this chapter may contract with each other, and with districts organized and incorporated under any other law of this state or under the laws of other states, for such outlet or outlets as the one may need and the other can furnish on such terms as may be deemed to be just and fair. The cost of obtaining such outlet or outlets to be paid as other expenses of the district for making improvements. If the districts cannot agree upon the compensation to be paid for the outlet, the district supplying the outlet, by action in the circuit court of the county wherein the district for which the outlet is supplied is organized, may recover from such district fair and just compensation for supplying the outlet. Any compensation received by the district shall be applied to improving its ditches or levees or reducing taxation or indebtedness.