The news last week that the U.S. Environmental Protection Agency has finalized a 10-year deal allowing New York City to use unfiltered Catskills/Delaware water made lots of people smile. The EPA was happy with the city’s plans to keep the water clean without filtering. The city was glad to be spared the multibillion-dollar cost of building a filtration plant. Environmentalists were pleased that City Hall committed to spending hundreds of millions to protect its watershed.

But in the towns that make up the city’s huge west-of-Hudson watershed, the finalized “filtration avoidance determination,” or FAD, was further cause for consternation, not celebration. Many citizens there think that the city’s plan to purchase $300 million of upstate real estate between now and 2017 – in the name of protecting the watershed – will hurt economic development. They’re so upset that they’ve already sued the EPA. And when the EPA hands off the duty of regulating New York City water to the state Department of Health (and it’s not yet known when that will be), opponents of the FAD have said they may try to employ state environmental review laws to halt or reshape the city’s land purchases.

Federal law requires most U.S. drinking water to be filtered to prevent human consumption of dangerous pathogens like cryptosporidium and other fecal bacteria – unless the EPA grants a FAD, as it does to New York City and a handful of other towns that can certify their water is clean enough to drink without filtering. In exchange for the 2007-2017 FAD, the city must complete a variety of steps to keep its watershed clean, like repairing stream beds, building and maintaining local sewer systems in the water supply area and managing stormwater runoff. The heart of the city’s program, however, is a pledge to spend $300 million buying watershed land or easements on properties where the owner agrees to limit activities that the city deems a threat to water quality. While some advocates would like to see even more spent, the size of the city’s land-buying commitment has generally delighted environmentalists.

It has, however, distressed officials in Delaware County, to say the least. One of the eight counties covered by the city’s massive watershed, Delaware County is home to all of 48,000 people—to whom the risk of overdevelopment seems remote. A nearer and more present danger, locals say, is that the city’s land buying will disrupt the already struggling local economy.

“We have a big forestry industry. We have a big bluestone industry. And when the city buys land, there’s that much less land left for the people who work in those industries,” says Dean Frazier, Commissioner of Watershed Affairs for the county. “We’re the fourth- or fifth-poorest county in the state. They’re going to take away jobs in natural resources industries that have been there for hundreds of years.”

It’s not that Delaware County doesn’t like clean water, Frazier says. He contends his county government has spent $5 million of its own money studying ways to protect the watershed. And while he drinks well water rather than reservoir water at his house, Frazier and his neighbors’ health depend on keeping the city’s watershed clean, too. The issue, he says, is the ripple effect of the city’s spending. It drives up land values, forcing people out who can’t afford to buy houses. That hurts tax rolls and even depletes the volunteer fire and ambulance companies that serve rural areas. And while the FAD includes a lot of help for watershed towns in the way of septic repairs and wastewater upgrades, that city’s commitment to that part of the program is up for review in five years, while the land purchases are locked in for a decade.

What’s more, upstate watershed officials say they weren’t consulted about making the FAD span a decade or comprise $300 million in acquisitions. “Quite frankly, it’s building resentment here toward this agreement like I’ve never seen,” says Frazier.

In April, the Delaware County Board of Supervisors passed a resolution denouncing the FAD. In May, several upstate lawmakers launched an anti-FAD website, fadisbad. Around the same time, the Coalition of Watershed Towns sued the EPA and state Department of Health in federal court. Their claim: that the EPA was supposed to have handed primary control of watershed regulation to the state DOH in May. The EPA opted not to do so, citing concerns over whether DOH had enough authority to enforce watershed laws, and has not set a date for the handover. The lawsuit claims that EPA broke the law by canceling the handover without a hearing. But the real point, say the watershed towns, is that once authority for regulating the watershed is in state hands, the State Environmental Quality Review Act, or SEQRA, could require the completion of an Environmental Impact Statement before the city can begin its multimillion-dollar land purchasing campaign.

The city seems to have a sense of the brewing resentment upstate. DEP Commissioner Emily Lloyd recently met with the head of the Coalition of Watershed Towns, Pat Meehan, to discuss the upstate concerns. But under the surface of supporters’ celebration over the FAD, advocates recognize that the concerns of watershed communities could threaten the long-term survival of the 1997 deal that made the city and upstate towns partners in protecting the water.

“I think the whole vision of the [watershed deal] was a spirit of partnership. I think that’s something that’s started to break down,” says Leila Goldmark, an attorney at the water protection group Riverkeeper. “This is one of the big issues not addressed in the FAD: How can they assist upstate communities with economic development while keeping the water supply safe?”

– Jarrett Murphy