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A Caltrans contractor likely filled in a wetland without the proper permits during construction work along Highway 101 south of Petaluma, Sonoma County officials said, an action that could trigger state and federal fines or efforts to restore the damaged environment.

The apparent violation — stemming from activity that began in late 2012 — has put a much-needed stockpile of construction materials essentially on hold pending environmental study, and could delay or drive up costs on a pair of Highway 101 widening projects totalling $87 million, according to the contractor, Ghilotti Bros.

Caltrans maintains that the work will be delivered on time and within the budget.

The reported violation occurred at a staging area alongside the highway that Ghilotti Bros. has used to stockpile more than 50,000 cubic yards of dirt and crushed concrete for the construction project.

The San Rafael-based construction company leased the five-acre site — at 4555 Redwood Highway — from the Dry Creek Rancheria Band of Pomo Indians. But Ghilotti Bros. failed to obtain the required permits to store the material, county officials said.

"After doing a site visit, we determined that wetlands were likely on the site," said Misti Harris, a county planner. "It is highly probable that wetlands were filled in."

The discovery happened late last year after Caltrans refused to take material from the staging area, citing Ghilotti Bros. lack of permits for the property. The rejection forced the company to apply to the county and triggered the county inspection.

Ghilotti Bros., for its part, said its own environmental consultants determined there were no wetlands on the site, near the Petaluma River.

"We thought we were doing the right thing," said Mike Ghilotti, president of Ghilotti Bros. "Wetlands come and go. They're seasonal. We didn't go and put dirt on top of water."

The dirt remains in a large heap at the staging area, located less than a mile from the southernmost highway construction site. Caltrans will need the material this summer to fill the route for a widened highway roadbed and interchange ramps.

Ghilotti Bros. is pushing Caltrans to allow use of the fill, arguing that it will be cheaper and more environmentally friendly since it would save having to haul material from farther away.

"The dirt is there; the project needs it," Mike Ghilotti said. "Just let us take it to the job and be done with it."

But the company must secure permits from state and federal agencies before it can get a go-ahead to use the stockpiled material on the highway project, Caltrans officials said.

The Dry Creek Rancheria, meanwhile, has terminated its lease with Ghilotti Bros., leaving the fate of the valuable construction materials in further limbo.

Ghilotti Bros. established the stockpile site in November 2012 to serve its Highway 101 widening projects at South Petaluma Boulevard and the Petaluma River bridge.

The company's bids for the two projects, which total $87 million, were lower than those of other contractors partly due to the cost-savings of having a materials staging area so close to the construction site, Ghilotti said.

The company could have used staging areas that Caltrans provided within its right of way, but chose not to do so, according to Allyn Amsk, Caltrans spokesman.

When Ghilotti Bros. in April applied for a county use permit, it hired Sacramento-based consultant Environmental Science Associates, which studied the site and determined that no wetlands existed within the stockpile area.

As part of the permitting process, the county visited the site in late November and looked at historical aerial photos to make its wetlands determination, said Harris, the county planner.

She said that Ghilotti Bros. likely needs permits from the state Regional Water Quality Control Board and the U.S. Army Corps of Engineers, which have regulatory jurisdiction over wetlands.

Each of the agencies is working with the county on the permit requests, but it is unclear how long the process might take, setting up the possibility of a conflict with the summer construction schedule.

The company also could face fines if the regulatory agencies determine that wetlands were filled without proper permits, said Dale Bowyer, section leader with the water quality control board.

"We're just at the beginning of getting our arms around the situation," he said. "If it is established that wetlands were filled without a permit, that's a big problem."

Laurie Monarres, division chief with the Army Corps of Engineers, said the agency is studying the property to determine if the stockpile is sitting atop so-called "waters of the United States" — those subject to the Clean Water Act — in this case wetlands that drain into the Petaluma River, a navigable waterway that empties into San Pablo Bay.

"We're most likely going to be looking for the material to be moved to an upland area and not in the waters of the U.S.," Monarres said.

Meanwhile, Ghilotti Bros. says the Dry Creek tribe is on the hook to provide the required environmental documentation to obtain the permits since the company no longer has a lease on the land.

Calls to tribal chairman Harvey Hopkins were not returned.

If Ghilotti Bros. is not able to use the dirt for highway construction, it may have to truck in materials from other sites around the North Bay, a costly proposition, Ghilotti said.

"We're done with the site," he said. "It's not an active site anymore. We need to get the material off the site and cut our losses."

(You can reach Staff Writer Matt Brown at 521-5206 or matt.brown@pressdemocrat.com.)