The governing body of any city of the third class is hereby authorized and empowered to construct and improve the streets and alleys of the city, and may cooperate with the state or with the federal government, or both, in the planning and financing of any such improvement. If state or federal funds are available to apply to the costs of any such improvement, the city may enter into such agreement and contract with the state or federal government as necessary and proper to obtain financial aid from the state or federal government for that purpose.