(1) Any rural or suburban fire protection district may elect to enter into a contract with another rural or suburban fire protection district to consolidate or cooperate for mutual fire protection and prevention purposes, or may enter into a contract with an incorporated city or village for fire protection service or fire protection cooperation, upon terms suitable to all concerned, and power to make such contracts is hereby conferred upon such city or village in addition to such other powers as have been heretofore provided by law.

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(2) A rural or suburban fire protection district may establish a service award benefit program pursuant to the Volunteer Emergency Responders Recruitment and Retention Act and may appropriate and expend funds for the cost of any such program for volunteer members of a volunteer department of a city of the first or second class or village or other rural or suburban fire protection district with which the district has a contract for emergency response services.