If the department reports within the specified time that the supply of water available for the use of the proposed district or that may be acquired by any practicable means, including the condemnation of existing rights, is not sufficient or that the project is not feasible for any other reason, the hearing of the petition shall be continued for not more than two months and shall then be dismissed unless within the period of the continuance either:
(a) The board of supervisors is petitioned in writing by three-fourths of the holders of title to land to grant the petition.
(b) The board of supervisors, if not so petitioned, modifies the project proposed in the petition to conform to the recommendations made by the department for the proposed district.