Notwithstanding section 364.2, subsection 4, paragraph “a”, for the purposes of obtaining or qualifying for federal funding, a city may grant a franchise to a rural water district incorporated under this chapter or chapter 504, for a term of not more than forty years. In addition to the franchises listed in section 364.2, subsection 4, paragraph “a”, a city may grant a franchise to a rural water district incorporated under this chapter or chapter 504, to erect, maintain, and operate plants and systems for sewer services. All provisions of section 364.2 shall otherwise apply to a franchise granted to a rural water district.