In addition, the water supply was insufficient to help battle the many fires that ravaged New York City. In 1865, the Croton Aqueduct Board was empowered to acquire land in Putnam and Westchester counties necessary for the construction of storage reservoirs.

Completed in 1878, the Middle Branch Reservoir was the first reservoir for the Croton System constructed in Southeast. In 1891, Sodom Dam was built, creating the East Branch Reservoir, and ultimately the Diverting Reservoir was constructed below the Village of Brewster.

Much of the area's available farmland was flooded and homes were moved for the reservoir construction. And while Southeast may have lost its agriculturally based industries, the Town gained a beautiful, bucolic landscape that has attracted residents and visitors alike.