Grand Jury Calls for New Code of Ethics : Conduct: The panel criticizes the appearance of impropriety by county officials involved in approving David H. Murdock’s luxury housing development in Lake Sherwood.

The Ventura County Grand Jury, criticizing the conduct of several public officials involved in billionaire David H. Murdock’s Sherwood Country Club project, recommended Monday the creation of an ethics board to write a code of conduct for county officials.

The grand jury said it found no evidence that county officials acted illegally in working with Murdock since 1987, when his 1,900-acre country club and luxury housing development at Lake Sherwood was approved.

It found, however, that some county employees and officials had created an “appearance of impropriety” by attending a barbecue hosted in 1989 by Murdock at his Arabian horse ranch in Hidden Valley.

Several permit requests were still pending before the county at that time, the panel noted. And the developer’s controversial proposal to form a special district to tax new residents--and possibly existing ones--for millions of dollars in improvements at the lake still has not been voted on by the Board of Supervisors.

“Although such conduct is not illegal, citizens have the right to observe their public servants conducting themselves in a way which exemplifies fairness towards all and favoritism towards none,” said the panel.

The report did not name the officials who attended the barbecue, but county Public Works Director Art Goulet said that he and more than a dozen other county officials and employees who had worked on the project attended the fete at Murdock’s request.

Supervisor Madge L. Schaefer, in whose district the project is located, planning chief Thomas Berg and Robert Braitman, whose county agency oversees the formation of special tax districts, also attended, Goulet said.

“He wanted the opportunity to thank everyone personally for all the work they had done to bring the project to fruition,” Goulet said Monday. “He spent a lot of time explaining his vision of the project, and I think it was valuable. You gained a better understanding of the project in its entirety.”

Goulet said that, except for Murdock’s proposal for a special tax district, the developer had already gained all non-routine approvals required for construction of 650 luxury homes near the lake near Thousand Oaks.

“There was nothing unethical” in attending the barbecue, the public works director said. Schaefer said a county ethics code, if so strict it would have kept her from attending Murdock’s barbecue, might also ban meetings with homeowners groups. “Where do you draw the line?” she said. “I don’t think there was any breach of ethics here.

“The essence of this report is what this project has created,” Schaefer said. “It has saved 125 families their homes because their septic tanks were in failure and they had no potable water. The only solution was to bring in sewer and water lines, which they could not afford.”

Murdock representatives declined to comment until they read the grand jury report, which was released Monday.

Murdock, in arguing before the Board of Supervisors in 1987, pledged to build sewer and water mains that connect existing houses to community systems, and he has, Schaefer said.

“I think that over time this project is going to be such a tremendous asset for the county. People will look back on this report and say, ‘What are they complaining about,’ ” she said.

The detailed, 22-page grand jury report, which caps six months of investigation, also faulted county officials for an alleged lack of communication that will allow Murdock to sell Lake Sherwood for millions of dollars rather than give it away to a community group.

In 1987, Murdock pledged the “dedication” of the lake. The grand jury said that county supervisors testified that they thought he had committed himself to giving it away. In 1988, he first mentioned selling the lake, but it was not until last month that county officials sought to clarify his position, the grand jury said.

County lawyers decided that the meaning of “dedication” was not clear in the original approval and concluded that they could not force Murdock to give up the lake without payment.

To avoid such confusion, the panel recommended changes in the way the county investigates proposed developments and monitors them after they are approved.

The panel was particularly critical of Murdock’s pending proposal to form a district to tax all of the area’s property owners--both existing and future homeowners--for perhaps $20 million to repay him for improvements around the lake.

To sweeten the deal for the existing 122 homeowners, Murdock agreed in 1987 to pay their sewer and water taxes.

But Murdock also wants taxes to be levied against both the 122 existing homeowners and 650 future owners of luxury houses at his new country club to repay him for the millions of dollars he has spent to fill the once-empty lake and to repair and improve it.

He has pledged to reimburse existing homeowners for their share of the cost of repairing the lake if they will join another special tax district to be formed soon to maintain the lake in the future.

The proposal for a special tax district to pay for all Murdock’s water, sewer and lake improvements is expected to be considered by the Board of Supervisors next month. The grand jury recommended that the request be denied because Murdock’s proposed tax district would give the developer leverage to pressure existing homeowners to join the lake maintenance district.

During the grand jury investigation, lake-area residents said jurors had questioned them about Murdock’s relationship with county officials, including Supervisor Schaefer, whose 1988 campaign fund-raiser Murdock hosted at his nearby Arabian horse ranch.

The supervisor noted Monday that the grand jury had cleared her of any wrongdoing.

“Allegations were made by some of an improper relationship existing between the developer and certain elected officials within Ventura County,” the grand jury said. “During the course of this investigation, the Grand Jury found no credible evidence which would substantiate those allegations.”