Flannery Civil Engineering Ltd, of Willow Bridge Way, Castleford appeared before Kirklees Magistrates' Court and admitted one environmental offence relating to the incident at Lindley Park in November 2013.
It was fined £9,000 with over £2,415 in costs.
In addition, Miller Homes Ltd, of Edinburgh, also appeared before Kirklees magistrates to admit a similar charge for its involvement in the same incident.
The company will be sentenced at Leeds Crown Court on Monday, 11 April.
The court heard how the polluted water should have been managed on the construction site, and that neither company had permission to discharge silt water from the site.
Miller Homes contracted Flannery to develop four storage lagoons in order to reduce the risk of flooding downstream. Straw bales were used on the outflow of the lower lagoon to prevent silt from leaving the site.
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However, following heavy rainfall, the lower lagoon filled with water, and Flannery removed the straw bales to allow it to drain. With the bales removed, silt water ran directly into the watercourse, affecting water quality.
A member of the public reported the pollution incident to the Environment Agency (EA), which sent an officer to investigate. He found that the watercourse was running a dark brown colour, and traced the source back to the development site.
In addition, the officer also saw that the straw bales were situated at the side of the lagoon, no longer filtering the discharge. Water entering the top lagoon was clear, but the water leaving the bottom lagoon was cloudy.
Prosecuting for the EA, Chris Bunting told the court that, in the opinion of the investigating officer, using straw bales to filter sediment was an "inappropriate and inherently risky pollution prevention strategy".
In addition to no evidence of routine sampling or monitoring of the lagoons, Miller Homes claimed Flannery carried out monitoring, but Flannery claimed no responsibility for the design, operation, maintenance or monitoring of the lagoons.
An EA spokesperson said: "Construction sites of any kind can have a detrimental impact on the environment. Silt and sediment in particular is a very common problem – that's why it is vital that construction companies take their environmental responsibilities seriously and ensure that effective pollution prevention is planned into every development at an early stage."
In mitigation, Flannery apologised to the court, and accepted they had been negligent by failing to have measures in place to cope with an overfilling lagoon. In 42 years of trading they had no previous convictions.
The company was also ordered to pay £2,415.03 in costs.
(LM)
