The Commissioner of Highways may, subject to the approval of the Board, upon request of the governing bodies of towns with a population of less than 3,500, according to the last United States census, select certain streets and highways in such towns for maintenance, improvement, construction, and reconstruction from allocations available from secondary highway funds not to exceed two miles of streets or highways in such towns included in the secondary state highway system, whether such two miles of streets or highways constitute connecting links between highways in the secondary state highway system in the counties or between highways in the secondary state highway system and highways in the primary state highway system, or not. The Commissioner of Highways, with the approval of the Board, in addition to the said two miles may increase the mileage of streets and highways in such towns annually, not to exceed in any one year one-fourth mile, exclusive of any mileage transferred from the primary state highway system under the provisions of § 33.2-315 or any mileage maintained by the Department prior to its annexation by such town.