Excavation by Water Agency Is Investigated : Environment: The Serrano Irrigation District allegedly ran an illegal mining project in rare wildlife habitat in Weir Canyon.

A local water agency is under investigation by federal and county authorities for running an allegedly illegal mining operation that damaged a county park, wiped out valuable wetlands and may have destroyed the habitat of an endangered species.

The Serrano Irrigation District, working with a contractor, dug a large, 25-foot-deep pit behind Villa Park Dam along Santiago Creek and removed almost one million tons of silt between 1985 and 1991.

Federal authorities allege that the water district violated a permit granted for the project, while county environmental officials allege that it failed to obtain the proper county permits for the operation and bulldozed four acres of Irvine Regional Park.

The FBI and the Orange County district attorney’s office are conducting separate investigations.

“We discovered that there was an immense operation which had been operating for years, right up to the day we were out there to investigate,” said Jim Miller of the county’s Environmental Management Agency, which referred the case to the district attorney’s office. “They were processing sand and gravel through a portable plant and trucking it out.”

The site, in Weir Canyon, contains Orange County’s largest single stand of willow woodland, a type of freshwater wetland that is considered one of California’s rarest and most valuable wildlife habitats, according to U.S. Fish and Wildlife Service biologists. Biologists estimate that 75% to 90% of Orange County freshwater wetlands have been destroyed.

Officials from the Serrano Irrigation District acknowledge that their six-year operation--which ended last year because of flooding in the area--spread into the county park. But they say that was accidental, caused by confusion over property boundaries. Otherwise, they maintain that they did not violate environmental laws because federal and state authorities had approved their project in 1986.

David Noyes, general manager of the water district, also said the excavation was a maintenance project, not a mine, and therefore is exempt from county mining controls. The intent, he said, was not to profit from the removed materials, but to protect an important underground pipeline that collects and delivers water.

“We never had a sand and gravel mine. We had a desilting operation,” Noyes said. “We have a pipeline behind the dam, and when the flows come down Santiago Creek, the silts in the water over the years plug up that pipeline. So we go upstream and dig it out.”

The operation was profitable for the small water agency, which provides water to residents of Villa Park and part of Orange. About 900,000 tons of silt were removed, and the water district earned $543,406 from 1986 to 1991 by selling excavated materials to its contractor, district records show. The money, Noyes said, was put into the district’s general fund, which totals about $1 million annually.

“We’re in the water supply business, not the mining business,” Noyes said. “The material they took out was silt, and it wasn’t high quality. If we were mining sand, we would need processing and washing, which we didn’t do. All we did was remove silt.”

A federal wetlands permit was granted for the project in 1986. But federal officials allege that the operation ballooned, doubling or even tripling its allowable limit of 8 1/2 acres. They also said that it was authorized to continue for only two years, not six, and that far too many truckloads of material were removed during the six years to be simply a maintenance project.

In a letter to an FBI agent, officials from the U.S. Fish and Wildlife Service said aerial photographs show the excavation “steadily increased” since 1985 and that “this apparently unauthorized work may involve criminal conduct.” They estimate that the digging spread to at least 20 acres.

“There are serious concerns about what happened out there. There are regulations that should have been adhered to that weren’t,” said Bruce Henderson, a project manager for the U.S. Army Corps of Engineers, which enforces federal wetlands laws and grants the permits.

Noyes, however, maintains that the digging encompassed no more than 8 1/2 acres and that federal and county officials may be confused by nearby, unrelated excavations that were done long ago by a private mining company.

Federal wildlife officials are especially concerned because the project in Weir Canyon may have disrupted nesting grounds of the least Bell’s vireo, a songbird on the nation’s endangered species list. The bird, which resides in Southern California’s willow woodlands, has few such places left to nest.

“Although the destruction of such a large parcel of wetlands is reason enough for consternation, the service is particularly concerned and interested in this apparent unauthorized activity because of its actual or potential effect on the least Bell’s vireo,” the Fish and Wildlife Service said in its letter to the FBI. “It seems entirely possible that past unauthorized activities on the site have impacted or destroyed habitats that are being used (or might otherwise have been used) by vireos.”

Although vireos were not there when the excavation began in 1985, they have been seen in the area during the past two spring breeding seasons, said Loren Hays, a Fish and Wildlife Service biologist. Hays said he saw a breeding pair and at least one single vireo there in 1991 and two males this year.

Noyes said he was unaware of the bird sightings. A consultant hired by the water district to study the area’s resources reported in 1991 that there were no endangered species found there.

“That’s news to us if there’s any wildlife out there,” Noyes said.

The FBI investigation is focusing on possible violations of the federal Clean Water Act, which protects wetlands. The probe by the district attorney’s office centers on whether the water district, the Orange Unified School District--which co-owns the land--and the contractor violated local and state mining regulations.

Deputy Dist. Atty. David S. Kirkpatrick, whose investigation began three months ago, said he has not yet decided whether to file misdemeanor charges in the case.

“The thrust of the investigation by the D.A.’s office is at what point are you crossing over into a full-blown mining operation?” Kirkpatrick said. “I think they have clearly gone beyond the limit of just a maintenance operation to a commercial venture, and they would need a permit under those circumstances.”

FBI agents, based in Santa Ana, declined to comment on their investigation, which began over a year ago.

Orange County officials also filed a civil lawsuit against the water agency, the school district and the contractor, seeking to force the three parties to return the parkland to its original condition.

Concerns over the excavation date back to 1986, when the local chapter of the National Audubon Society complained about the digging. The Corps of Engineers issued a “cease and desist” order to the water district, which then obtained its permit.

The county renewed its investigation in March, 1991, when area residents complained that the huge pit was eroding an equestrian trail. Later that month, heavy rains hit the area, filling the pit with water. The project was halted because of the flooding, and district officials say they have no plans to resume it.