A municipality is entitled to receive state aid and to expend state aid moneys in conjunction with moneys furnished by the municipality on state aid streets in the municipality on projects approved for construction in the municipality provided:
(1) The state aid system in the municipality has been designated and approved as provided in this subchapter;
(2)
(A) The municipality has employed or retained an engineer who is a registered professional engineer to act for and on behalf of the municipality as a whole.
(B) However:
(i) If any mayor or chief executive officer is a registered professional engineer, the mayor or chief executive officer may perform the duties provided under this section for the municipal engineer; and
(ii) A municipality may contract with the Arkansas Department of Transportation for engineering services in lieu of employing or retaining a municipal engineer.
(C) The cost of employing or retaining a municipal engineer or contracting with the department for engineering services shall be paid from the municipal street funds of the municipality and shall not be payable from the State Aid Street Fund.
(D) Engineering costs on federal-aid projects may be included as a cost item of the projects; and
(3) The municipality has complied with all rules promulgated by the state aid engineer.