A delay until after the drought may not be an option because the dam is not expected to survive a major earthquake. It's under federal orders for a seismic upgrade by 2018.
The drought has impacted the level of Anderson Reservoir, the largest by far of the storage lakes operated by the Santa Clara Valley Water District. But it's also being kept low because of concerns it could crumble after a major earthquake.
"The top of the dam could actually slump and crack, and if that should happen, if the reservoir were full, water could run over the reservoir and cause erosion, and the entire dam could erode away, and all the water behind it would be released," said Marty Grimes from the Santa Clara Valley Water District.
The dam was built in 1949. At the time, it was believed it sat on bedrock and that two faults running below were inactive. However, Morgan Hill had a 6.2 earthquake on April 24, 1984 that knocked houses off their foundations.
In a worst case scenario, engineers estimate that a similar event today would put downtown Morgan Hill under 35 feet of water. Federal and state regulators have ordered the dam to undergo a seismic safety upgrade. Doing that requires trillions of gallons of water to be drained. That's a lot of precious water during a drought.
When full, Anderson reservoir holds 90,000 acre feet of water -- enough to supply 180,000 homes for a year. Some people argue that weakens the district's call for drought conservation.
"There may be ways that we could stage the construction so that we could do some the most essential parts, like the downstream embankment before we do the upstream embankment, and the downstream embankment wouldn't require emptying the reservoir," said Grimes.
The reservoir currently stands at 50 percent of capacity and will not go beyond 68 percent as a safety precaution.
Those living in the path of potential destruction don't want to risk a delay. They point out the reservoir's low level, due to the drought, is an opportunity.
"I think it's important that the dam is functional and with the drought the way it is now, it's time to take advantage of it," said Debbie from Morgan Hill.
