The reservoir was created in 1950 by the construction of the Anderson Dam across Coyote Creek in foothills of the Diablo Mountains east of Morgan Hill. The reservoir and dam were named after Leroy Anderson, a key founder and first president of the Santa Clara Valley Water District. It is the largest reservoir owned by the district.
In January 2009, a preliminary routine seismic study suggested a small chance that a large-magnitude earthquake could result in flooding in Morgan Hill and as far away as San Jose. In response, the Santa Clara ValleyWater District lowered the water level to 74 percent of capacity and announced further analysis of the situation, which could possibly result in retrofitting the dam if necessary. Updated findings in October, 2010 indicated that the dam could fail if a magnitude 7.25 earthquake occurred within of the dam, potentially releasing a wall of water high into downtown Morgan Hill in 14 minutes, and deep into San Jose within three hours. In response SCVWD has lowered the water to 54% full, which is feet below the dam crest. In July 2011, SCVWD issued a report stating that the seismic stability study on Anderson Dam was completed. The storage restriction that has been in place since October 2010 was adjusted, allowing 12 additional feet of storage, which measures 68 percent of the dam's capacity, up from 57 percent. The water district initiated a capital project for a seismic retrofit by the end of 2018. The operating restriction was to remain in place until the project complete. Remediation of the problem will cost as much as US$100 million. In December 2016, SCVWD reported that further geotechnical analysis indicated considerably more work would need to be performed on the dam, effectively removing the dam completely and rebuilding it. The existing dam had been built on alluvial deposits, which could liquefy during an earthquake. Accordingly, the estimated cost rose to US$400 million and the start of work was rescheduled to 2020, with completion planned for 2023–2024. After years of additional studies and interim actions, the Federal Energy Regulatory Commission dismissed the Water District's plans as insufficient to address the risk of catastrophic failure, and ordered on February 24, 2020 that Anderson Lake should be drained by October 1. The letter noted that the district's "actions to date do not demonstrate an appropriate sense of urgency" regarding the risk of catastrophic failure in the case of earthquake.
San Jose flooding
On February 21, 2017 during the 2017 California floods, the reservoir reached as high as 104% of capacity, creating a large flow over the spillway into Coyote Creek, which overflowed and flooded the Rock Springs/Summerside, Olinder, Naglee Park, Roosevelt, Wooster-Tripp and Berryessa neighborhoods of San Jose along US Highway 101 between the reservoir and the south San Francisco Bay.
Anderson Dam
The high earthen dam measures long by wide and sits along the Coyote Creek Fault on Coyote Road, east of Morgan Hill. The reservoir itself is situated parallel to the Calaveras Fault, which runs from Hollister to Milpitas. It holds over of water when full, more than the other nine reservoirs in the county combined.The Anderson Lake County Park is managed by the Santa Clara County Parks and Recreation Department. Features in addition to the county's largest reservoir are the Coyote Creek Parkway multiple use trails, the Jackson Ranch historic park site, the Moses L. Rosendin Park, the Burnett Park area, and Anderson Lake Visitors Center. Coyote Creek Parkway, a paved trail along Coyote Creek that heads north to Hellyer County Park, is used for hiking, jogging, bicycling, horseback riding, and skating.
