(a) By the terms of an instrument evidencing an encumbrance of a mass transportation system or the terms of an ordinance, a municipality may place the management of a mass transportation system with the governing body of the municipality or a board of trustees named in the instrument or ordinance.
(b) A board of trustees of a mass transportation system must consist of three to nine members, one of whom must be the mayor of the municipality. The instrument or ordinance must set the trustees’ compensation, which may not exceed two percent of the gross annual receipts of the system. The instrument or ordinance may specify:
(1) the term of office of the board of trustees;
(2) the board’s powers and duties;
(3) the manner in which the board may exercise its powers and duties;
(4) the election of the trustees’ successors; and
(5) any matter relating to the board’s organization.

(c) On any matter not covered by the instrument or ordinance, the board is governed by the laws and rules controlling the governing body of the municipality to the extent applicable.