The growing valley towns are regularly faced with a fact of Santa Clara Valley life - it's picturesque creeks and rivers periodically flood. Unlike the tradition of the Ohlone natives, these permanent settlements cannot move to higher ground. Winter flooding begins to threaten valley homes, businesses and lives.
By the turn of the 20th century nearly 14,000 acres of orchards and vineyards are under irrigation in Santa Clara Valley. Wells are tapping into the underground aquifer at an ever-increasing rate, and for the first time local farmers notice a significant drop in water levels.
As water levels drop, sections of the valley floor begin to sink. Concern over subsidence grows and in 1920 farmers and business leaders push for the formation of the Santa Clara Valley Water Conservation Committee. The committee hires noted engineer Fred H. Tibbetts of Campbell to study the situation and develop a plan. Tibbetts and his partner, Stephen Keiffer, recommend an ambitious project to construct a series of 17 large reservoirs to capture rainfall and begin the process of replenishing the underground aquifer through artificial recharge.
The Santa Clara Valley Water Conservation District, formed in 1929, begins construction on the district's first six reservoirs. In 1935, Calero, Almaden, Guadalupe, Vasona and Stevens Creek reservoirs are completed. Coyote Reservoir is completed in 1936. Recharging of the underground aquifers begins. The South Santa Clara Valley Water Conservation District is formed to build percolation facilities and manage creeks and groundwater in the area.
Flooding, however, is still a serious issue in the valley. Floods in 1931, 1937 and 1938 halt transportation and inundate hundreds of acres of orchards and pasture lands.
The population in the county jumps from 30,000 in 1940 to 90,000 in 1948, then to 291,000 in 1950. This explosive post-war growth, combined with a major drought from 1940 - 1946, puts a severe strain on local water resources. Groundwater levels continue to drop due to increased agriculture, industry and residential construction, and land subsidence worsens due to overpumping. In response, voters pass bonds to construct two more large dams for water storage and percolation: Lexington and Anderson.
Ironically, in the midst of the drought and dropping water levels, heavy rains in 1940, 1942 and 1943 trigger devastating floods, causing power failures and leaving four dead in the Gilroy area.
The Central Santa Clara Valley Water Conservation District is formed to manage groundwater in the Morgan Hill region.