City council members met for about a half hour before their decision was made.
Many of the council members said that it was hard to reject the money that Fort Stockton Holdings -- and oilman Clayton Williams -- was offering. But they said that the voice of community was too strong to ignore.
But the battle is still not over. The Middle Pecos Groundwater Commission can still approve the permit.
The settlement that was turned down offered the city millions of dollars over the next couple of years.