A watershed paradox.

AS NEW YORK CITY STRUGGLES TO PROTECT WATER QUALITY AND UPSTATE FORESTLANDS, THE CHOICES ARE CLEAR: EVERYBODY WINS OR EVERYBODY LOSES.

It is a paradox of seemingly impossible proportion: How can New York City, with 8 million people packed onto a sliver of riverfront and barrier island, boast one of the nation's purest municipal water supplies?

The answer lies 125 miles away, in the Catskill Mountains of upstate New York. Here lies a 1,600-square-mile watershed where palisades fall in forested flanks to meadowed valleys. Storied trout streams fill six mountain lakes that provide New York City with 90 percent of its water supply. Three-quarters of the City's Catskills/Delaware watershed remains forested; family farms and church steeples punctuate what remains. The Catskills landscape is a pastoral ideal and a natural water purification system, and has been ever since Washington Irving penned the tale of the slumbering Rip Van Winkle.

But not long ago the sleeping issue of the City's water quality was roused by the sharp elbows of the U.S. Environmental Protection Agency. In 1990 the federal government decreed that all public supplies of surface water be filtered for microbial contaminants. For New York City, the nation's sole million-plus municipality that did not already filter its water, that meant the construction of a $4 billion to $6 billion plant to filter the waters that flow from its upstate watershed.

What has happened since then is as improbable and fantastic as turning a South Bronx water tap and getting a clean drink. After years of open warfare, last year the City and some 30 watershed communities signed the New York City Watershed Agreement, a $1.4 billion deal to protect the working landscape of family farms and woodlots that have protected the Catskills/Delaware watershed for decades. (Water from the city's heavily developed Croton watershed will have to be filtered.)

Simply put, the plan frees New York City from filtering water from the watershed, provided it can otherwise meet 66 EPA "filtration avoidance criteria." In return, Catskills communities and landowners - under threat of drastic regulatory control of development and resource use - get a pot of badly needed gold to help pay for programs designed to simultaneously protect water quality and shore up traditional land uses. The City will spend $550 million to improve water quality in dozens of watershed communities, such as upgrading more than 100 aging sewage treatment plants and repairing or replacing failing septic systems. Another $666 million is earmarked for land and conservation easement acquisition and partnership programs. New York state will kick in $53 million to foster partnership projects and aid innovative agriculture and forestry programs designed to protect water quality.

The New York City Watershed Agreement epitomizes a burgeoning new emphasis on rural-urban common-ground agreements for watershed protection and water supply. In California, the historic Delta-Bay Accord of 1994 created Called, a combined effort of state and federal agencies to study water issues in the vast estuary where the delta of the Sacramento and San Joaquin rivers meet San Francisco Bay. Since then, rural communities from far northern stretches of the state have worked to become vocal participants in California water supply decisions (see A Watery Issue, Winter/Spring 1997).

Few communities, regardless of their region, are immune from conflict, and in New York, dollars are making the difference. "Money to the kazillions is driving this deal," says Nancy Wolf, a New York City environmentalist instrumental in crafting common ground for the City. That money will raise the typical city water bill by about $35 a year by the year 2002 and pay for programs as diverse as logger training, timber-management workshops for absentee urban forestland owners, and Best Management Practices for dairy farms and woodlots. And that has melded urban and rural perspectives.

"It's always easier to perpetuate an Us versus Them mentality," says Alan White, forest program manager for the Watershed Agricultural Council (WAC), charged with administering the agreement's farming and forestry components. "But this is really a 'we.' It is their watershed, but it is our livelihood."

And lest anyone forget, says Wolf, the land in question deserves protection on its own merits. City dwellers get more than clean water in this deal, she says. They get land protections that will provide outdoor recreation and prevent the kind of development that has despoiled the Croton watershed.

The New York City Watershed Agreement addresses three sets of interests: watershed communities, the Catskills agricultural community, and the forestry industry and forest landowners. Catskill dairy farmers first approached the City about crafting mutually beneficial, nonregulatory watershed protections after the City's 1990 list of proposed restrictions contained rules so stringent the agricultural community feared collapse.

The result was a sweeping voluntary program through which farmers enroll in a Whole Farm Planning concept to control farm-pollutant runoff and manage wastes. So far, more than half of the nearly 500 dairy and livestock farms in the Catskills have signed up for the program.

At the same time, Catskill communities began talks with the City about sewage treatment upgrades, septic system overhauls, and other infrastructure improvements to reduce their portion of watershed pollution. The City agreed to underwrite many of the improvements and also agreed to purchase thousands of acres of watershed property from willing sellers. To protect the local tax base, the City will pay taxes on land it purchases.

With the farmers and watershed communities forging innovative partnerships, Catskill foresters are now moving ahead with plans to be water-quality players themselves. The Catskills forestry community faces challenges common in regions where an urban-rural nexus defines large parcels of undeveloped land. White estimates that 85 percent of the forestlands are owned by private, nonindustrial landowners, and perhaps half of those are absentee owners from the New York metropolitan region. Those conditions, coupled with high taxes on timberlands, create turnover rates that make long-term woodlands management nearly impossible.

The New York City Watershed Agreement contains dramatic initiatives, but it isn't universally lauded. "There are many people who think the problem is now solved," says Eric Goldstein, an attorney for the Natural Resources Defense Council. "Nothing could be further from the truth." Goldstein cites a number of perceived shortfalls, among them the lack of a limit on sewage treatment plants with surface discharge allowed in the watershed and loopholes in buffer zone requirements.

Others question whether a massive voluntary program could ever work, even though EPA has the ability to scuttle the deal if the plan heads for failure.

But by connecting Catskills landowner goals to the City's need for clean water, all sides appear to walk away a winner. "I can't go into a town meeting and tell these people what all they have to do for 9 million people in another part of the state," says Ira Stern, deputy director of the City's Division of Environmental Protection. "But by focusing on mutual benefits, we've been able to go way beyond minimum standards."

The most difficult part of the New York Watershed Agreement will have more to do with human behavior than silviculture or call-barn design. "The toughest part," says the WAC's White, "is the social science." Many Catskills residents recall when their families were forced off their land to make way for the reservoirs, so anger and distrust of the City keep the wounds open. If the agreement is to work, however, a compact born of decades of distrust will need to bear the fruit of conciliatory generations to come. After all, says Wolf, "This agreement is like a living, breathing thing - it is mind-boggling what we are passing along. Succeeding generations will have to be brought into this."

Fortunately, there are good role models, people like Tom Hudson, a farmer who once threatened physical violence if New York City officials crossed his fencelines but ultimately offered his farm as a demonstration site for the Whole Farm Planning concept. And like Allen Rosa, the quiet, thoughtful town supervisor of Middletown who attended upwards of 500 planning meetings, many unpaid and on his own time. Why? "We try to grub a living out of these hills," he says, "because this is home."

And like Jack McShane. Eleven years after the retired New York City police officer bought his beloved 240 acres of Catskills woods, he can hardly believe his good fortune. "To think that I own something like this," he says in a gravelly near-whisper, "is just amazing."

In many respects McShane is a typical Catskills forest owner - a downstater who moved to the region to escape urbanization. Unlike many others, however, he has taken a keen interest in managing his woods for wildlife and aesthetics. Currently president of the Catskills Forest Association, he is particularly interested in educating absentee Catskills landowners about "all the plusses of cutting wood," he says, "when you do it right."

McShane's careful management reflects an attitude of stewardship that needs to become the Catskill norm if New York City is to protect its water and the watershed is to escape the stranglehold of stringent regulation. Gazing over the wooded ridge that marks his northeastern horizon and guards the Pepacton Reservoir, McShane speaks a prophetic line, one that says as much about the Catskills woods as New York City's water: "After all," he says, nodding towards the ridge, "it's not my mountain. It's just my watch."

Eddie Nickens is a freelance writer based in Raleigh, North Carolina.