Valley Water’s Board of Directors today announced it has awarded a $1.88 billion to rebuild the Anderson Dam near Morgan Hill.
The contract for the Anderson Dam Seismic Retrofit Project, to begin in early 2027, was awarded to Flatiron Dragados Sukut ADSRP Joint Venture and will take seven years to complete.
At a total cost of about $2.8 billion, the Anderson Dam Seismic Retrofit Project is one of the largest and most complex infrastructure projects in Valley Water's history. The Sukut firm is a Southern California firm that is rebuilding the Isabella Lake dam project in Kern County, The Flatiron Dragados firm is a Spanish company that is a major contractor on the California High Speed Rail Project.
Valley Water officials said the project will rebuild most of the Anderson Dam and spillway, install new outlet pipes and complete other major safety upgrades to protect the structure from a major earthquake. The project is designed to improve water supply reliability, support groundwater recharge, reduce flood risk, and restore recreation at Anderson Reservoir and along the Coyote Creek corridor in southern Santa Clara County.
Built in 1950, Anderson Reservoir is the largest of Valley Water's 10 reservoirs. It is so large that all nine of the agency's other reservoirs could fit inside it, according to Valley Water.
“Rebuilding Anderson Dam is our top priority,” said Valley Water Board Chair Tony Estremera in a statement. “This milestone reflects years of hard work, collaboration, and perseverance by our staff, contractors, regulators, and community partners. Today marks the next phase of one of Santa Clara County's most important water infrastructure projects that will benefit our community for generations to come.”
Since 2023, the agency has received more than $114 million in state and federal grants for critical water infrastructure projects in Santa Clara County. Valley Water said it is working to secure both state and federal funding for the Anderson Dam Seismic Retrofit Project “to help keep water rates as affordable as possible.”
The construction contract announced today follows years of planning, engineering, environmental review, and regulatory approvals for the seismic retrofit project. Most of the precursor projects to meet regulatory requirements, help manage flows in Coyote Creek and prepare the site for rebuilding Anderson Dam have been completed, the water district reported.
The centerpiece of that effort is the Anderson Dam Tunnel Project, now in its final stages and on track to be completed later this year. The new tunnel replaces the dam's existing 4-foot-diameter outlet pipe with a new 13-foot-diameter outlet. This larger tunnel will allow Valley Water to release larger flows into Coyote Creek during construction and better manage reservoir levels during future storms and emergencies. The new tunnel will be functional this winter and could be used if our region experiences significant rain events.
Valley Water said it is on track to complete all five of the supporting projects before construction on the new dam begins. Together, these projects will allow Valley Water to reduce impacts and safely keep Anderson Reservoir empty while the new dam is under construction.
Valley Water operates a sprawling network of reservoirs, dams, pipelines, treatment plants and groundwater recharge facilities that work together every day to serve nearly 2 million people across Santa Clara County.
Valley Water is a public, non-profit agency. On July 1, new water rates took effect. The Valley Water Board approved a $1.284 billion budget for fiscal year 2026–27 and a 9.1% increase in the North County groundwater charge earlier this year. For the average household in much of Santa Clara County, that
The Board has delayed or suspended projects that faced financial or regulatory challenges, like the Pacheco Dam project. Since February 2024, Valley Water has paused hiring for 45 positions, saving about $1 million each month.
