[Introduced by Bob Johnson, Reclamation Regional Director]

Today, I am pleased to announce the selections for the Water 2025 Challenge Grant program.

This new program is at the heart of our Water 2025 initiative. It seeks out collaborative projects at the local level that will stretch existing water supplies. These projects improve water by conservation and management through advanced technology and modernized facilities.

There has been tremendous support for the program - we received more than 100 proposals in this, our first year. The response shows the eagerness of potential partners to team with the federal government to prevent crises and conflicts over water in the West.

Obviously, we are in the midst of a serious drought, which has been compounded by rapid growth of population and the needs of endangered species. It is just a warning of the shortages that could come. We need to think outside of the box. We need conservation and innovation. Challenge grants recognize these types of projects.

Non-federal matching funds of at least 50 percent are required as part of the Program. All of the proposals focused on conserving water and improving efficiency of operations.

We have 19 recipients. These projects represent 10 Western States - from California to Colorado, from Montana to Texas. Tree of the projects are located here in Arizona, and I will say a bit more about them shortly.

The 19 selected projects represent at total of almost $40 million in on-the-ground improvements to help water delivery systems. Federal grants of $4 million will help to fund these proposals. That is a ten percent investment from the federal side.

Water 2025 is a West-wide program with several components. While we area here today to celebrate the Challenge Grant Program, we also want to mention the other important parts of Water 2025. Of the $8.4 million appropriated for Water 2025 in Fiscal Year 2004, about half has been invested in targeted areas and projects like the Middle Rio Grande and the Desert Research Institute. We put the remaining $4 million into the creation of the Challenge Grant Program as a way to leverage those funds.

I'm very pleased that there were so many proposals. For the next year, Fiscal Year 2005, President Bush has requested $21 million for Water 2025, and we expect the grants program to thrive.

The challenge grants support realistic, cooperative, local approaches and tools that focus on the most pressing water challenges. They include such measures as water banks, new technology to modernize water delivery facilities, and the removal of institutional barriers to improve water management. We expect to see results quickly - proposed projects are to be completed within 24 months.

The Challenge Grant program exemplifies the Bush Administration's emphasis on partnerships and local decision-making and management.

Water 2025 was founded on the principles of my 4 C's: Conservation through communication, consultation, and cooperation.

Cooperative conservation focuses on partnerships and results. Our goal is to create healthy lands and waters, thriving communities, and dynamic economies. We believe that our prospective recipients will be able to do just that.

As I mentioned, three of our 19 Challenge Grants are awarded to agencies here in Arizona. I would like to briefly describe their proposals.

Our first prospective recipient is the Gila Gravity Main Canal Board in Yuma. In partnership with the City of Yuma and the North American Development Bank, the Gila Gravity Main Canal Board will make canal system improvements to conserve water, restore canal capacity and improve operation efficiency.

Five irrigation districts, the City of Yuma and other domestic water users will all benefit from the project. Improvements include sealing high seepage points, removing sediment, and installing a high-tech measurement system to gauge water flow.

The project will save about 45,000 acre-feet of water per year (One acre-foot supports a family of four for one year.) The conserved water will be made available to other Colorado River users. The total project cost is $2.2 million, with a Water 2025 contribution of $284,000

Our next prospective recipient is the Salt River Project in Tempe. The New River-Agua Fria Underground Storage Project will construct a recharge facility that can store up to 1 million acre-feet of water underground. The facility is designed to take available water supplies including both excess Central Arizona Project and reclaimed water.

The project furthers the water management objectives of the Phoenix metropolitan area, including improving water adequacy and supply reliability, and meeting state-mandated water resources goals.

The project will help to reduce conflict among water agencies, meet unmet water needs brought on by explosive population growth in the area, and improve flexibility in water management. This is a major project, and Water 2025 is just one of many sources of funding. In addition to the Reclamation and the Salt River Project, the partners include the cities of Avondale, Chandler, Glendale and Peoria. The total project cost is $13 million, including a Water 2025 contribution of $200,000.

Our third recipient is the Yuma Country Water Users Association. The Association will upgrade technology for water tracking and measurement of water flow. The project will also reconstruct key diversion structures along the main canal to facilitate remote control of water flows.

This modernization will reduce diversions from the Colorado River and provide an overall savings in water diversions of 12,000 to 20,000 acre feet per year. The total project cost is more than $615,000, including a Water 2025 contribution of about $264,000.

I would like to congratulate our 19 prospective recipients and thank all of those who sent proposals.

Long-lasting solutions to chronic water shortages will come from the people whose lives are most affected. These Challenge Grants recognize the best solutions and help make them a reality.

It is heartening to see states, local water organizations and other stakeholder and citizen groups take the lead in resolving differences, looking to innovative solutions and helping to map out the future of water management for the next generations of Westerners.

All of us benefit from the innovation and 'can-do' spirit exemplified by these projects. We expect that the success of these partnerships will encourage and inspire others to become better stewards, and they in turn will influence their friends and neighbors to do the same.

Collaboration is the key. Working together as partners through Water 2025, we can make a difference in preventing crises and conflict over water for years to come.

Thank you.