Morgan Hill’s Anderson Reservoir, which spilled over and flooded central San Jose neighborhoods in 2017, could be an even bigger problem in an earthquake. Fixing the dangerous reservoir is a priority, but that comes at a price.
Projected costs of the massive reconstruction project have risen to approximately $2.3 billion, according to a Valley Water engineering report.
Two years ago, the estimate was $648 million. That nearly doubled last year to $1.24 billion. The Valley Water board of directors is now looking at $2.3 billion—more than triple the 2021 forecast.
“Several factors contributed to the increase in the construction estimate,” the September report said. “Risk reduction measures were added, such as the articulated concrete block auxiliary spillways for interim dams and a supplemental bid item for 1-year delay due to a shortened construction season.”
“Current market conditions have been incorporated into the construction cost to reflect significant increases in material costs, such as concrete and steel, and increases in assumed contractor markups for overhead and profit,” the report said.
The new price tag includes $1.9 billion for the dam and spillway construction, plus approximately $400 million for related projects.
The completion date, 2032, has not changed.
The federal Environmental Protection Agency early this year announced $737 million in low-cost loans for the project, but the Valley Water board will be taking a new look at how to pay for it all, including possible increases in its wholesale and retail water rates.
Anderson Reservoir, built in 1950, is the largest of the district’s 10 water reservoirs.