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Update to proposed expansion of Pacheco Reservoir includes changes to dam, spillway and increased costs

January 11, 2021
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Pacheco Reservoir
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In 2017, Valley Water moved forward with plans to expand Pacheco Reservoir in South Santa Clara County. As part of a partnership with the San Benito County Water District and Pacheco Pass Water District, the project would increase the reservoir’s capacity from 5,500 to up to 140,000 acre-feet, enough water to supply up to 1.4 million residents for a year.

To help pay for this major infrastructure project, Valley Water in the same year applied to receive state funding from the Water Storage Investment Program (WSIP). In the application, Valley Water included an initial cost estimate of about $969 million for the proposed project. This cost estimate was based on 2015 dollars, which was a requirement for the application.

Based on the extensive public benefits the project provides, the Pacheco Reservoir Expansion Project received the highest rating under the WSIP program and was awarded $484.5 million in conditional WSIP funding in 2018. The award included $24.2 million in early funding to help cost share for the planning and documentation efforts.

Valley Water has received about $7 million to date, which has helped fund planning studies, geotechnical investigations, environmental surveys and preliminary design.

Due to projected inflation that affects all projects over time, the estimated project cost rose to about $1.3 billion in 2019.

In 2020, Valley Water performed a more detailed design study which included an updated cost estimate. This design study indicated that construction costs for the proposed project had increased to about $2.5 billion, prompted largely by major changes to the dam and spillway design.

Some of the changes included:

  • Deeper excavations to reach the dam foundation. This results in additional costs for the foundation excavation and materials to build the dam.
  • A reconfigured spillway design to provide necessary stability, which increased costs substantially.
  • This also resulted in a longer estimated construction timeline, which means added labor costs. Several other challenges to the project were also identified, such as constructing access to the site and other utilities.

Because of these changes, we now estimate construction on the project will take eight years to complete. Previously, the estimated construction timeline was five years. 

Valley Water is exploring ways to reduce the estimated project costs and secure additional funding sources.

On Dec. 28, Valley Water staff presented the projected cost increase to the Board’s Water Storage Exploratory Committee. That committee, led by three Valley Water board members, recommended a board audit to learn more about the price increase.  The committee made it clear they want to make sure Valley Water continues to be effective stewards of public funds while meeting the water supply needs of Santa Clara County.

At a board meeting on Jan. 12, 2021, the directors received an update on the project alternatives and costs. After discussing the information presented, the directors instructed staff to continue with planning and design of the proposed project, which includes holding public scoping meetings for the draft environmental impact report. Two public meetings are planned on Feb. 24 and 25; more details will be posted on our website and social media platforms.

During the board meeting, the directors approved the recommendation to perform an audit to determine the timeline associated with cost increases for the project. The directors also expressed a desire for Valley Water to do more outreach and two-way engagement with all members of the community.

Moving forward, the Valley Water Board will make a decision that makes fiscal sense and looks out for water supply needs in Santa Clara County. The Valley Water Board of Directors is looking at all ways of increasing our water supply, including storage, recycled water, advanced purified water and conservation.


Valley Water manages an integrated water resources system that includes the supply of clean, safe water, flood protection and stewardship of streams on behalf of Santa Clara County's 2 million residents. The district effectively manages 10 dams and surface water reservoirs, three water treatment plants, an advanced recycled water purification center, a state-of-the-art water quality laboratory, nearly 400 acres of groundwater recharge ponds and more than 275 miles of streams. We provide wholesale water and groundwater management services to local municipalities and private water retailers who deliver drinking water directly to homes and businesses in Santa Clara County.