Challenge Grant Program Overview

Q. What is the Water 2025 Challenge Grant Program?

A. The Challenge Grant Program is the heart of Water 2025. It seeks out collaborative projects at the local level that will stretch existing water supplies by improving water conservation and management through advanced technology and markets. Through this program, Federal funding is provided to irrigation and water districts for up to 50% of the cost of projects involving conservation, efficiency and water marketing. This is the second year of the Challenge Grant Program. Last year approximately $4,000,000 in grants was provided to 19 recipients. Grant amounts ranged from $19,338 to $300,000.

Q. What kinds of activities will be considered for funding under the Challenge Grant Program?

A. Projects that reduce water-related conflicts through water conservation, water use efficiency, and/or water markets. Examples include, but are not limited to, development of water accounts that would facilitate water markets; retrofitting and modernizing existing storage or conveyance facilities to achieve better water management through use of new technology (e.g., automation, telemetry, or SCADA systems); and installation of new measurement devices that will result in more accurate measurement and accounting, leading to increased efficiency. Descriptions of the 19 projects selected for funding in 2004 can be found at www.doi.gov/water2025/

Q. What are the objectives for the Challenge Grant Program in 2005? Have they changed from last year?

A. As in 2004, the emphasis in 2005 will be directed towards proposals that are likely to reduce water related conflicts through water conservation, efficiency and markets. Proposals should result in a measurable increase in water use efficiency, conservation, and/or create water marketing opportunities, and the work needs to be completed within 24 months from the date of award. Studies will not be funded under the Challenge Grant Program.

Q. Who is eligible to apply for Challenge Grant funding?

A. Eligible applicants include irrigation and water districts, tribal water authorities, and entities created under state law with water delivery authority, which may include water user associations, water conservancy districts, canal, ditch and reservoir companies, and municipal water authorities. Applicants must also be located in the western United States, as identified in the Reclamation Act of June 17, 1902, as amended and supplemented, specifically, Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming. Those not eligible for funding under the Challenge Grant Program include other state governmental entities, Federal governmental entities, universities, individuals, and other entities without water delivery authority.

Q. Are cities, states, state water boards or counties eligible to apply for Challenge Grant funding?

A. City and county entities may be eligible if they have water delivery authority. The current authority does not include state governmental entities, such as states themselves, state water agencies, or state engineer’s offices.

Q. Does an applicant have to be a part of a Reclamation project or deliver water that comes from a Reclamation project?

A. No. However, proposals with a connection to Reclamation will receive more weight in the evaluation process. In addition to receiving water from a Reclamation project, other connections to Reclamation that will be considered could include location of the proposed work on Reclamation project lands, involvement of Reclamation facilities, or location of the proposed work in the same basin as a Reclamation project or activity, particularly where the proposed work will contribute water to a basin where a Reclamation project is located.

Q. Can eligible entities submit proposals that include partnerships with ineligible entities?

A. Entities that are ineligible may participate by contributing funds, expertise, in-kind services or other assistance as a partner. However, contributions from other Federal agencies may not be counted as part of the applicant’s cost share.

Q. Can individual water or irrigation districts join together with other eligible districts, cities and other partners to submit a joint proposal?

A. Yes. However, one of the partners must serve as the primary applicant and submit a board resolution acknowledging their responsibility to ensure that their partners meet the commitments outlined in the proposal. In addition, all funding partners must submit letters of commitment confirming their support for the proposal and their intent to provide the specified amount of funding.

Q. Does the proposed work have to be located in a “Hot Spot” as identified on the Potential Water Supply Crises by 2025 illustration, May 5, 2003 (the “Hot Spots Illustration”) in order to be selected for a Challenge Grant?

A. No. However, proposals for work in Red, Orange, or Yellow areas on the Hot Spots Illustration (http://www.doi.gov/water2025) will receive additional weight in the evaluation process. Additionally, applicants that are not located in a Hot Spot are given an opportunity to justify why proposals for work in other areas would work to prevent water-related crises.

Q. What is the performance period for proposals funded by the Water 2025 grants?

A. The work must generally be completed within 24 months of execution of the Cooperative Agreement. Multi-year proposals may be considered if the applicant can demonstrate measurable on-the-ground accomplishments each year.

Q. How much money is available for Challenge Grants in FY 2005?

A. President Bush requested $20 million for the Reclamation portion of Water 2025 for FY 2005. Once Congress passes the budget for FY 2005, Reclamation will announce the funds available for the Challenge Grant Program.

Q. What is the grant request process for 2005?

A. The process is very similar to last year. The Request for Proposals (RFP) contains directions on completing and submitting the proposal, including a suggested proposal format, and contains contact information in the event additional clarification is required. The RFP can be found at www.grants.gov (keyword search: Water 2025).

Q. When are grant applications due?

A. Complete grant applications must be received by 3:00 p.m., Mountain Standard Time, at the location specified in the RFP by January 21, 2005.

Q. Who will decide which proposals will be funded in 2005?

A. Proposals will be screened to ensure they meet the minimum mandatory application requirements, and if they meet those requirements, they will then be reviewed by a technical review team made up of professionals from Reclamation with a wide range of expertise.

Q. Where can I find the mandatory requirements for Challenge Grant applications?

A. A summary of the application requirements can be found in the checklist on page 3 of the RFP.

Q. Will Reclamation advise a potential applicant on the merits of its proposed project?

A. No. Reclamation will not pre-screen, validate, or discuss the substantive aspects of proposals. It will be up to the applicant to determine wither a proposal matches the objectives of Water 2025 and the requirements of the RFP. Refer to Section I of the RFP for guidance on acceptable types of projects.

Q. If I received a grant in 2004, can I submit a new proposal for 2005?

A. Yes, as long as the new proposal is for a different project than the one funded in 2004.

Q. If I submitted a proposal for a Challenge Grant in FY2004 that was not selected for funding, can I resubmit that proposal in FY2005?

A. Yes. However, we recommend that you review the FY 2005 RFP and related guidance to ensure that your proposal meets the mandatory requirements and program objectives.

Q. Can I submit more than one proposal for funding?

A. Yes. An eligible entity may submit more than one proposal for consideration. Each proposal will be reviewed and evaluated on its merits, independently of other proposals.

Q. Is the board resolution requested in the RFP a mandatory requirement? If so, what must the resolution state?

A. The board resolution is a mandatory requirement. The resolution must contain a verification that the applicant’s board or governing body has reviewed and supports the proposal, that the applicant is capable of providing the amount of funding specified in the funding plan, and that, if selected, the applicant will work with Reclamation to adhere to deadlines for entering into a cooperative agreement. A suggested format for the resolution is included in Section IX of the RFP.

Q. When and how will I find out whether my proposal has been selected?

A. Reclamation expects to make initial selections of proposals in April, 2005. At that time, Reclamation will notify applicants whether their proposal has been selected for further review, or whether it has been eliminated from further consideration.

Q. Is there a maximum amount of Federal funding that I can apply for?

A. Reclamation’s share of any one project may not exceed 50% of the total project costs, and shall generally not exceed $300,000 per project. However, Reclamation may approve projects that exceed this amount on a case-by-case basis.

Q. Will proposals with less than 50% cost share be considered?

A. No. Applicants must provide at least 50% of the total project costs from non-federal source(s), either in cash or in-kind contributions.

Q. Can costs incurred prior to grant award be counted as the recipient’s cost share?

A. Certain project costs—such as design, construction plans, environmental compliance and permitting, and construction—that have been incurred after September 30, 2004 (the beginning of the Fiscal Year) may be submitted for consideration as an allowable portion of the recipient’s cost share.

Q. Can the cost of preparing a proposal be counted towards the recipient’s cost share?

A. The costs of proposal preparation are allowable to the extent that they are reasonable and equitable. Proposal costs should be treated as indirect costs and allocated to all activities of the applicant in accordance with its indirect cost rate proposal.

Q. Can in-kind services be counted as part of the cost share? What constitutes in-kind services?

A. Both cash and in-kind contributions from the applicant, or third party non-federal partners, can be counted as part of the recipient’s cost share. All in-kind contributions will require the prior approval of Reclamation and must comply with the OMB administrative and cost principles circulars applicable to the applicant (see Section VIII.A of the RFP). In-kind contributions are considered the value of non-cash contributions that benefit a Federally-assisted project. These contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the proposal.

Q. What environmental laws and regulations must be complied with?

A. The specific environmental laws and regulations that must be complied with will vary based on the nature of the individual proposal, but may include the National Environmental Policy Act (NEPA), which may require consultation with potentially affected Tribes, the Clean Water Act, the National Historic Preservation Act, which requires consultation with the State Historic Preservation Office, and the Endangered Species Act.

Q. When will environmental compliance be completed?

A. Once a proposal has been initially selected for further review (initial selections are expected to be made in April, 2005), Reclamation will work with the applicant to complete environmental compliance.

Q. Who is responsible for completing environmental compliance activities?

A. Reclamation is responsible for determining the appropriate level and adequacy of environmental compliance. However, Reclamation and the recipient will work together to decide who (Reclamation, the recipient or a consultant) will prepare any necessary environmental compliance analyses or reports.

Q. How will environmental compliance costs be allocated between Reclamation and the recipient of a Challenge Grant?

A. Applicants must include a line item in their budget for the estimated cost of complying with all applicable environmental laws and regulations. The line item should be based on the actual expected environmental compliance costs, but must be equal to at least 2% of the total project costs. Reasonable environmental costs included in the line item will be considered project costs, and will be cost shared by the applicant and Reclamation.

Q.Where can I go for additional information?

A. Check the Water 2025 web site at www.doi.gov/water2025, send an email to Water2025RFP@do.usbr.gov, or contact Avra Morgan, Water 2025 Program Coordinator at 303-445-2906.