Applications for loans for irrigation distribution system projects or municipal distribution system projects which involve extreme hardship which jeopardizes the public health, safety or welfare shall be made in the following manner:
The governing body of the public agency shall submit an application to the department describing, generally, such extreme hardship existing with respect to the water supply, the financial and economic conditions existing in the area, and the proposed project. The statements by the governing body shall be based upon, and the application shall be accompanied by:
Ca. Water Code § 12882.2