WHEN the World Resources Institute compiled its recent Green Cities Index based on 14 environmental criteria, Austin ranked second (after Honolulu) of the 64 largest United States cities.

If attitude had been included, Austin might easily have soared to first place.

For this is a city with a special municipal court to handle "environmental" cases ranging from property neglect to the neighbor's noisy pet. City personnel teach xeriscaping (low-water landscaping). There are composting workshops, nontoxic pest-control seminars, and free household water-conservation devices. And there's no shortage of righteousness, either.

Construction of a hot-pink stucco Taco Cabana near scenic Town Lake drew protests about visual pollution. And a recent hearing on a zoning-variance request brought impassioned public comment. One speaker urged city officials not to let Austin become "another suburb of Houston, a virtual slum. Let us keep this a beautiful place to live."

Beautiful, it is. Austin is also unique and - least likely of all - as yet unspoiled. The Nature Conservancy has designated the Texas Hill Country, of which Austin is the gateway, as one of 12 "last great places" on earth.

"Austin does have some environmental gemstones that other cities don't have," says pollster Tom Jukam of IntelliQuest Inc. "Austinites are quite proud of that."

Residents also feel protective because many have made sacrifices to live near the rugged limestone hills, and gushing creeks and springs. As evidence, Mr. Jukam points out that Austin has the highest education level of the 50 largest US cities, yet incomes are far from commensurate. Stories abound of university graduates who wait tables rather than leave job-scarce Austin.

More and better jobs have come to Austin in recent years as the city has fostered the growth of "Silicon Mesa." High-tech companies have opened branches here, lured by the quality of life, tax abatements, and housing prices less than a third of California's. One recent victory: An Apple Computer operation is coming to Austin even though the city started out "fifth on a list of four" sites, says Chamber of Commerce chairwoman Carol Thompson.

Employment and population figures have raced ahead of the snowballing high-tech sector. The last decade saw the city add 130,000 jobs while reaching a size of 570,000.

Environmentalists reacted with alarm as new real estate developments pressured hill country habitats and recharge zones of the Edwards Aquifer - which, because of its geologic structure, is especially susceptible to pollution. Some 32 million gallons of water a day flow from the aquifer into Barton Springs - considered one of the 10 best swimming holes in the country - and then into Town Lake, the city's source of drinking water.

War quickly broke out between developers and environmentalists on two fronts, both of which are nearing critical junctures.

Faced with plans for a major development in the watershed feeding Barton Springs, the City Council asked its environmental department to update Austin's 1986 comprehensive watersheds ordinance, which in itself had been in the vanguard of efforts to protect urban watersheds.

The goal of the updated ordinance was to be "non-degradation" of existing water quality. But achieving that, it turned out, would mean excluding any commercial development in an area of some 50 square miles. Last October, the City Council adopted a less-stringent version of the ordinance, but one that is still a landmark in watershed protection.

ve heard a lot of misinformation from both sides," comments Raymond Slade, a hydrogeologist with the US Geological Survey. ve heard environmentalists claiming doom, and I've heard development types claiming no effect on water quality at all. Well, neither one is right."

Environmentalists, outraged that the interim ordinance was weakened, have drafted their own. They expect to announce Feb. 4 that they have collected enough signatures to have their ordinance put before voters in May. Brigid Shea, director of the Save Our Springs Coalition, calls it "the most stringent we thought we could pass. A lot of people wanted to go for a total moratorium on development. That's not sustainable. The other side is already going to howl that we're confiscating their property."

The second front is western Travis County, 300,000 acres of land that the US Fish & Wildlife Service says contain two endangered birds species and six endangered species of cave-dwelling bugs. The presence of these creatures prevents any development from going forward that would damage their habitat unless mitigating action is taken.

Environmentalists, developers, and city officials have been trying for 3 1/2 years to craft the Balcones Canyonlands Conservation Plan. It would set aside 30,000 acres to protect the species and free the rest for development.

If they succeed, it will be the largest such effort to date and could affect reauthorization of the Endangered Species Act later this year. But a host of issues remain. One of the thorniest is how to raise the $122 million the plan will cost. The plan is scheduled to be presented to Fish & Wildlife next month.

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