Preheat oven to 350°.
Lightly spoon flour into dry measuring cups, and level with a knife. Combine flour and sugar in a large bowl. Cut in butter with a pastry blender or 2 knives until mixture resembles coarse meal. Remove 1/3 cup crumb mixture; add water, stirring gently. Set aside.
Add baking powder and soda to remaining flour mixture; stir with a whisk. Add egg, buttermilk, and orange rind. Beat with a mixer at medium speed just until combined.
Pour batter into an 8-inch round cake pan coated with cooking spray. Sprinkle reserved crumb mixture over batter. Bake at 350° for 25 minutes or until a wooden pick inserted in center comes out clean. Let cool in pan 5 minutes. Remove cake from pan; cool on a wire rack. Sift powdered sugar over cake. Cut into wedges. Serve warm, if desired.