The department may adopt rules and regulations necessary for the effective administration of this part, including, but not limited to, the submission of plans, the procedures to be followed in applying for loans, and for enforcing agreements entered into by municipalities with the department with respect to such loans. Such rules and regulations shall require that an eligible project be so constructed, both as to materials and design, as to:
(1) Provide an adequate and safe supply of water for the area to be served;
(2) Provide for expansion and extension of the system, taking into consideration growth that can be reasonably anticipated; and
(3) Minimize costs of integration with another system or systems where proximity of such systems indicates that integration may become desirable.