The Board of Directors at Valley Water announced that it has awarded a $1.88 billion contract to reconstruct the Anderson Dam close to Morgan Hill. The project is set to launch in early 2027. The contract for the Anderson Dam Seismic Retrofit Project was granted to Flatiron Dragados Sukut ADSRP Joint Venture and will span seven years of construction. Carrying an overall price tag of roughly $2.8 billion, the seismic retrofit stands as one of the largest and most intricate infrastructure endeavors ever undertaken by Valley Water. Also, Sukut, a Southern California-based enterprise, is currently working on the Isabella Lake dam rebuild in Kern County, while Flatiron Dragados is a major Spanish contracting firm heavily involved in the California High-Speed Rail project. This project adds on to California’s dam infrastructure development, with others such as the North Haiwee Dam No 2 in Inyo County being constructed.
Scope of the Overhaul
Furthermore, Valley Water leadership explained that the initiative will overhaul the bulk of Anderson Dam and its spillway, put in place new outlet piping, and execute several critical safety enhancements to safeguard the dam against a powerful earthquake. The project is engineered to strengthen water supply dependability, assist groundwater replenishment, minimize flooding hazards, and bring back recreational activities to Anderson Reservoir as well as the Coyote Creek corridor throughout southern Santa Clara County. Constructed in 1950, Anderson Reservoir holds the title as the largest among Valley Water’s 10 reservoirs—so immense that the district notes all nine of its other reservoirs combined could fit inside its basin.
“Rebuilding Anderson Dam is our top priority,” Valley Water Board Chair Tony Estremera expressed in a formal statement. “This milestone reflects years of hard work, collaboration, and perseverance by our staff, contractors, regulators, and community partners. Additionally, 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.”
Starting in 2023, the district has successfully secured over $114 million through state and federal grants dedicated to vital water infrastructure across Santa Clara County. Also, Valley Water emphasized that it is actively pursuing additional state and federal aid for the Anderson Dam project in an effort to keep local water rates as manageable as possible.
Moreover, this newly announced construction deal arrives after years dedicated to engineering design, environmental evaluations, planning, and securing complex regulatory clearances for the seismic retrofit. The agency reported that a vast majority of the preliminary projects required to satisfy regulatory standards, control Coyote Creek flows, and ready the location for dam construction have already been wrapped up.
Anderson Dam Tunnel Project
Also, the flagship component of those early works is the Anderson Dam Tunnel Project, which is nearing completion and scheduled to wrap up later this year. The newly excavated tunnel swaps out the dam’s former 4-foot-wide outlet pipe for a significantly expanded 13-foot-diameter channel. This massive outlet will grant Valley Water the ability to discharge far higher volumes into Coyote Creek throughout the construction period and exert stronger control over reservoir capacity during severe storms or emergency scenarios. The new tunnel system will be operational this coming winter, ready for use should the area face heavy rainfall.
Moreover,Valley Water indicated that it remains on schedule to finish all five supporting auxiliary projects prior to breaking ground on the new dam structure. Functioning together, these preliminary efforts will allow Valley Water to mitigate local disruptions while safely maintaining an empty reservoir during the entire rebuilding phase.
Public Service
Serving nearly 2 million residents across Santa Clara County every day, Valley Water manages an extensive system comprising reservoirs, dams, conveyance pipelines, treatment facilities, and underground aquifer recharge basins.
Additionally, as a public non-profit entity, Valley Water implemented updated water rates effective July 1. Earlier this year, the Valley Water Board authorized a $1.284 billion operational budget for fiscal year 2026–27 alongside a 9.1% bump in groundwater charges for North County, directly impacting the average household bill throughout much of Santa Clara County.
Lastly, to manage expenditures, the Board has postponed or put on hold specific initiatives encountering regulatory or funding hurdles, including the proposed Pacheco Dam expansion. Furthermore, a hiring freeze instituted on 45 staff positions since February 2024 has yielded roughly $1 million in monthly savings for the agency.
Anderson Dam Seismic Retrofit: Project Factsheet
Project Name: Anderson Dam Seismic Retrofit Project (ADSRP)
Location: Morgan Hill, Santa Clara County, California (Coyote Creek Corridor)
Lead Agency / Project Owner: Santa Clara Valley Water District (Valley Water)
Original Dam Construction Year: 1950
Structure Type: Earthfill / Zoned Rockfill Embankment Dam
Original Dam Height: 235–240 feet
Reservoir Storage Capacity: 90,400 acre-feet (Largest of Valley Water’s 10 reservoirs)
Financials & Contracting
- Total Estimated Project Cost: $2.8 Billion
- Reconstruction Contract Value: $1.88 Billion (Awarded July 2026)
- Prime Construction Contractor: Flatiron Dragados Sukut ADSRP Joint Venture
- Lead Design Firm: AECOM
- Grant Funding Secured to Date: $114+ Million (State and Federal grants since 2023)
Timeline & Major Milestones
- Construction Schedule: 7 Years (2027–2034)
- Groundbreaking: Early 2027
- Precursor Tunnel Project Completion: Late 2026 (Operational for Winter 2026–2027)
Technical Scope and Infrastructure Upgrades
- Embankment Replacement: Complete teardown and rebuild of the main dam structure to withstand maximum credible earthquakes on the active Calaveras and Coyote Creek-Range Front fault systems.
- High- and Low-Level Outlet Works: Installation of new high-capacity low-level and high-level release outlets to permit rapid emergency drawdown of reservoir levels.
- Spillway Replacement: Demolition of the existing spillway and construction of a enlarged spillway capable of safely routing Probable Maximum Flood (PMF) events.
- Anderson Dam Tunnel Project (Key Precursor): Replaced the legacy 4-foot outlet pipe with a 13-foot to 24-foot diameter tunnel featuring articulated joints to absorb up to several feet of ground displacement without collapse.
- Decommissioning: Decommissioning of the existing 800-kW hydroelectric power plant.
Primary Project Objectives
- Seismic Safety: Protect high-density urban areas down-gradient (including Silicon Valley and San Jose. Additionally, it will protect Santa Clara County) from catastrophic dam failure during major seismic events.
- Water Supply Dependability: Restore full operating capacity to Santa Clara County’s primary surface storage and groundwater recharge basin.
- Flood Management: Enhance controlled release capacity into the Coyote Creek watershed during extreme storm events.
- Environmental Restoration: Restore wildlife habitats and fish passages. Also, it will restore public recreation areas along Anderson Reservoir and Coyote Creek post-construction.
Project Team
Project Leadership and Public Oversight: Valley Water
Prime Construction Joint Venture
- Flatiron Dragados Sukut ADSRP Joint Venture: General Contractor ($1.88B Contract Award)
- Flatiron Construction: Lead Joint Venture Partner
- Dragados USA: Joint Venture Partner
- Sukut Construction: Joint Venture Partner
Engineering Design & Specialized Consultants
- AECOM: Lead Design and Engineering Firm
- Live Oak Associates, Inc. (LOA): Environmental and Biological Planning Consultant
Regulatory & Oversight Agencies
- Federal Energy Regulatory Commission (FERC): Federal regulatory agency maintaining safety jurisdiction. Moreover, it maintains operational drawdown mandates over the dam and reservoir.
- California Division of Safety of Dams (DSOD): State agency overseeing engineering review, dam safety standards, and construction approvals.
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