The City of Cortland is situated directly above the Otter Creek aquifer. This high permeability sand and gravel deposit provides drinking water for the city and the surrounding Town of Cortlandville, but also poses a hazard in the form of groundwater-induced flooding along Otter Creek. In late July 2006, thunderstorms dropped up to 5.5 cm of rain in 2 hours in the Cortland area and flashfloods developed almost immediately in small headwater basins. However, flooding in the valley center on lower Otter Creek occurred several hours later and without any flooding immediately upstream, suggesting that enhanced groundwater flow into the channel was a major factor in the flood event. Flooding occurred on the same reach of Otter Creek in March 2011 when 2.8 cm of rain fell on a rapidly melting snowpack. In both cases, groundwater levels in the aquifer were within 1.2 m of the land surface immediately prior to the floods and rose by more than 0.5 m during the events. In contrast, the remnants of Tropical Storm Nicole dropped as much as 13.8 cm of rain on the area on 9/30/10 and 10/1/10, caused headwater flooding and a 2.4 m rise of groundwater in the aquifer, but no flooding occurred along lower Otter Creek because the water table was at its seasonal low prior to the rain event.

The reach of Otter Creek impacted by these floods is immediately downstream of the municipal wells at the Cortland Waterworks. LIDAR data shows minimal development of fluvial landforms upstream of the Waterworks, suggesting that most water moves through this area in the subsurface, and USGS aquifer models show converging groundwater flow at the Waterworks. These geomorphic and hydrogeologic data imply groundwater emergence at the Waterworks, and so does archival research that found that the Waterworks area was known as Otter Creek Springs when the first wells were dug in 1884. Unfortunately, this name has been largely forgotten as the city developed along lower Otter Creek. Today there is pressure from homeowners for mitigation of the flooding, with more channelization of lower Otter Creek and a 3.7 m dam having been proposed, and a detention basin currently being constructed. While the latter should reduce surface water flow into the flooding reach under high flow conditions, it is unclear how this basin will affect the groundwater component of the problem.