The proposed Highlands preservation area map has upset some local officials, even with its assurances that it will be flexible enough to ease their worries about losing the potential for tax-generating development.

Official feathers have been further ruffled by the fast pace of a bill that would put regulatory muscle behind the state's plans to acquire and protect large areas of the Highlands reservoir area. The legislation was introduced three weeks ago with a goal of voting it out of committee on Earth Day, which is Thursday.

"The timeliness of voting it out on Earth Day is nice. But that is the wrong goal," state Sen. Henry McNamara, R-Wyckoff, said Monday. "Our goal should be to work day and night for as long as it takes to come up with a good bill that can achieve consensus."

From Mahwah and Oakland in Bergen County to the far ends of Hunterdon County, local officials are trying to figure out what sites are inside the boundaries of a map that was released Friday. The map outlines land that should be protected because water running off it eventually reaches millions of water users in the state. Adding to officials' anxiety are questions as to who would decide what can be done in the preservation area.

The proposed bill, S-1/A-2635, would create a regional council to oversee conservation of watersheds. The proposed preservation area encompasses nearly half of the Highlands mountain region.

Within this area is a mix of established communities, protected open space, and privately owned and municipal tracts that are the focus of the preservation effort. At issue is what happens to development projects already planned for some of these tracts.

"That's the hottest topic of discussion right now," Sen. Bob Smith, D-Middlesex, the chairman of the Senate environment committee, said Monday.

"It's terrible for us," says Wanaque Mayor Warren Hagstrom, whose Passaic County borough would be divided into three parts - that is, a narrow corridor of existing homes and businesses sandwiched between two conservation areas.

"It would hurt us bad," Hagstrom said of the potential loss of anticipated tax ratables in a small town that has the Wanaque Reservoir on the west side of town and a state forest on the east side.

The eastern conservation area includes the site of a proposed 755- unit Pulte Homes age-restricted condo project and a smaller project with state-approved fair-housing units off Mountain Avenue. Both sites are near a water supply feeder stream at the base of Ramapo Mountain State Forest.

The western boundary line runs along the main street, Ringwood Avenue. Many homes and businesses were built decades ago near the reservoir. Hagstrom worries that including that portion of his town within the preservation area might hamper redevelopment in the business district.

The mayor fired off a salvo of letters to sponsors of the Highlands bill asking for changes in the map to allow projects to be built that have municipal approvals and just need a state permit or two.

"I think it's good overall," Hagstrom said of the preservation plan. "We do have to preserve the watersheds. But this Pulte property is in a sewer area," he argues. "It's a $268 million ratable with no children going to school."

Complaints such as Hagstrom's have been heard loud and clear in Trenton.

Smith said he and other supporters of the Highlands bill are debating how to handle such cases. His panel is holding a joint hearing with the Assembly environment committee in Trenton at 10 a.m. Thursday to review the 101-page bill and about 80 pages of proposed amendments.

"Today, I met with builders and environmentalists to talk about the bill," Smith said. "If the bill is not just right, we're not releasing it. This is a very complex piece of legislation."

In hearings held in the past two weeks in Ringwood, Morristown, and Lebanon Township, dozens of farmers, builders, and other Highlands residents raised worries that the proposed legislation would devastate their businesses and undercut their property rights.

"We're going to take care of the farmers, so they're not hurt," Smith said. "We're going to take care of mom-and-dad exemptions - you can build your home on your lot, add a deck or an addition to your house. The only thing that is going to be subject to the new regulations is the major developments."

But McNamara is concerned that the hearing process has been too fast for residents, municipal officials, and legislators to read and debate the proposed regulations and what would be included in the preservation area.

Consider, he said, the pile of amendments to the bill that were drafted to address questions raised in the public hearings in Highlands communities. These will be on Thursday's agenda.

"How do I walk into a committee meeting and read them and vote on it?" McNamara asked.

Another major issue that should be resolved before the bill is voted out of the environment committee, he said, is identifying sources of funds for buying land and compensating municipalities for the loss of land that might have been developed and paid increased property taxes.

"They are making a lot of land unbuildable - which is OK, if it can be scientifically proven it's needed to protect the water supply," McNamara said of the preservation area, which was drawn by the state Department of Environmental Protection. "But come up with the funds for compensation."

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