Grand Jury Looks at Builder’s Promises : Inquiry: Lake Sherwood area residents say a developer broke an agreement to provide new sewer and water systems.

The Ventura County Grand Jury is investigating whether billionaire David H. Murdock, who is building an oak-studded, 1,900-acre country club and housing development at Lake Sherwood near Thousand Oaks, has reneged on promises to provide free sewer and water systems to longtime area residents and to give the lake itself to buyers of his houses.

County officials and community residents confirmed Tuesday that they have testified before the grand jury in recent weeks about the Murdock project, where 650 houses priced up to $10 million each are planned. At present it consists of five large model houses and a $20-million clubhouse standing near a golf course.

The grand jury has questioned lake-area residents, they said, about Murdock’s relationship with county officials, including Supervisor Madge Schaefer, in whose district the project is located and whose 1988 campaign fund-raiser Murdock hosted at his nearby Arabian-horse ranch.

And sources said the jury is investigating whether a special community services district formed around the country club in 1989 was technically illegal because the district’s single resident--a Murdock employee living in a mobile home--was not a permanent legal resident. The purpose of the district is to maintain the lake and surroundings. If the district is ruled illegal, future buyers of the houses could re-establish it through an election.

Besides investigating crimes, grand juries have broad powers to look into important public issues where no crime has been alleged. Sources said there was no allegation of criminal wrongdoing in this case.

Murdock’s spokesman, Don Trotter, president of the company developing the country club, did not return telephone calls on Tuesday.

Just three years ago, Murdock was being praised by county officials and lake residents for promising to solve problems that have plagued the lake community for decades: poor water quality, septic tank seepage and inadequate maintenance of the man-made 160-acre lake.

Today the lake community is split among Murdock supporters and those who insist that he has broken his promises to build new sewer and water systems free in exchange for residents’ support in 1987, when the project was approved by the County Board of Supervisors.

A set of conditions attached to approval says that no existing homeowner at the lake can be charged for the new water system or be forced to pay for the new sewers, aside from fees for new connection to a sewer line.

However, the developer has recently proposed the formation of a special-assessment district that would require about 120 owners of existing Lake Sherwood homes to help residents of his new project pay for about $20 million in public improvements already in place, according to the county Public Works Department.

His proposal is being studied and will be forwarded to the Board of Supervisors in June or July, John Crowley, deputy public works director, said Tuesday.

Murdock wants the special tax not only to pay for sewer and water facilities but to buy Lake Sherwood from him. County officials say they are investigating the request, trying to determine if Murdock’s 1987 commitment to “dedicate” the lake to a community group in perpetuity meant that he would give the lake away, rather than charge for it.

“We’re investigating the issue,” Planning Division Manager Keith Turner said. It will be several days before county lawyers and staff members decide whether a promise to “dedicate” the lake amounted to a promise to give it away.

While county administrators study files and transcripts of hearings to determine Murdock’s intent, the grand jury is making a parallel investigation.

Two lake residents said the grand jury asked them about Supervisor Schaefer. She acknowledged Tuesday that she and other officials have been questioned but would not elaborate.

Schaefer said that her first political support from Murdock, a fund-raising brunch and horse show at the developer’s sprawling Ventura Farms, was in April, 1988, about nine months after supervisors approved Murdock’s country club development. Murdock had supported her opponent in 1986, when she was first elected to the board, Schaefer said.

She said it was long after Murdock’s project had been approved that she accepted two political contributions from him--a pony auctioned for $4,000 at the 1988 fund-raiser and a $1,000 donation in 1989. She said there is nothing improper in her plan to hold a fund-raiser this month at the clubhouse of his country club when the assessment district issue has yet to come before the board.

Schaefer, who noted that she faces an election in June, said she thinks that the grand jury investigation was prompted by a complaint from a political enemy.

“There are clearly political overtones to this,” the supervisor said. “There have been for six months. It’s a political ax to grind. I know exactly where they’re coming from.”

She would not specify who her enemy may be. But she said that her opponent in the June supervisorial election, Maria E. Vanderkolk, has had nothing to do with the investigation.

“People love me or they hate me,” she said. “I’m straightforward. Everybody knows where I’m coming from.”

Supervisors Susan K. Lacey and John H. Flynn said they are concerned about Murdock’s promises to build free sewer and water systems for the entire community.

Murdock also promised to “dedicate” the ownership of the lake, which he had spent millions of dollars to restore after it was drained by a previous owner in 1984, to a community or homeowners group at the new country club, the supervisors said.

“I know that our ultimate goal was to improve the sewer and water and to keep the lake in good shape,” Flynn said. “The old-timers came in support of the project because they were going to get some benefits too. This looked like the perfect solution.”

In 1987 Murdock won near-unanimous support from lake area residents and a change in the county general plan that will allowed an estimated 2,000 new residents in the secluded lakeside community.

Among residents, opinions about Murdock are mixed.

“During hearings, we were assured everything would be taken care of,” said Carl Price, president of the Lake Sherwood Community Assn. “That’s why everyone supported it. But if we end up being forced into this assessment district, I would say there’s been a violation of trust.”

But Jack Speirs, an ex-Walt Disney screenwriter who has lived at Lake Sherwood since 1943, said:

“Things are not going the way people hoped they would go, because they thought David Murdock would come in here and restore the lake and build new roads and let them go ahead and use the lake, and that they would not have to pay a dime for anything,” he said.

“Almost everybody’s either got their hand out or hoping to get it in somebody else’s pocket. But I still think Murdock is the second-best thing ever to happen to this lake. I’m the first.”