The Town Council of this time-worn Chesapeake Bay community 35 miles from Washington found a way of dealing with a rebeilicus police chief last month. They abolished his department.

As a result, a mini-civil war has broken out in the tiny community, pitting the council against a fifth of the voters who have petitioned to get their police department back.

While Mayor William (Buster) Fortier who was on the police chief's side, and the council and the townspeople work out their differences, the town has hired three state troopers to patrol the area. But the townspeople are already grumbling that the troopers aren't giving them the 24-hour protection they were accustomed to from their five-member force.

"Used to be when I was sittin' on my bed, watch' TV, if you sat there long enough, you'd see a police car come by," said Mildred Cox, a local elections board supervisor who is also a waitress in the Sea Breeze Restaurant. "But I haven't seen any troopers go by after midnight and I'm up every cotton pickin' night . . . I'm a night owl."

Now Chesapeake Beach, a town of 1,500 billed as "Washington's Only Salt Water resort" before the outlawing of slot machines and the death of its railroad line forced it into decline, is not exactly a crime capital.

According to local denizens, an occasional motorcycle gang will stop there for a pit stop, young couples sometimes use the weed-strewn beach for more than sun-bathing, and some of the townspeople are known to tip the bottle too much.

It's just that having their own police department has become a matter of civic pride to this Calvert County community.

But among the six town council members, their discontent with the law enforcers has been growing steadily. The officers, they complained had to be pulled from their beds when they should have been on duty. They also had been known to go "fooling around with the local women," according to one council member.

There was no stopping the officers from racing to answer calls in Anne Arundel County, or other nearby communities. "I guess it gets too boring for them here," said council member James Mayberry, a retired PEPCO employe who runs a fishing boat on the bay.

"In a small town, you can't afford to pay the benefits to attract high-quality police officers . . . Some (of the Chesapeake) officers had been in two prior departments. Some had worked in as many as seven or eight," said Council President Gerald Dovovan, 30, a burly man whose soft nasal drawl makes you think you're much farther south than Southern Maryland.

"What you wind up with is a department of rejects," he added.

That "department of rejects" was costing the town $85,000 a year - the largest single expenditure in the town's $414,000 budget. The starting pay for an officer was $10,800. For the chief it was $12,500. There was no retirement plan.

Against this backdrop entered Gerald Murray, 51, a retired 23-year-old veteran of the D.C. police, who, looking to supplement his retirement pay took the job of a Chesapeake Beach's chief in June 1977.

Murray, a former canine officer, began doing things differently. He hired police officers with no ties to the community. He took police cruisers to garages outside the town for repairs.

Then, Murray and his officers began giving traffic tickets to the "wrong people," as one officer put - the employes of Donovan's restaurant and the father-in-law of another council member.

According to Murray, Donovan asked him "numerous times," to "do something about" tickets that Donovan's friends had received. Murray, who got federal funds to purchase a police cruiser equipped with moving radar, said Donovan called him a "Hitler" and said his men were "radar happy."

Donovan, however, says he merely told Murray and another officer to "use more discretion" in giving out tickets. He denies asking Murray or any officers to "fix" tickets.

He was particularly upset, Donovan said, about a $10 ticket one of his employes had received on day in the rain for parking illegally a short time. As a longtine resident of the community, Donovan said, the woman should have gotten just a "chewing out."

Councilman Charles Davis acknowleged going to one officer who he thought had given his father-in-law a "stupid" ticket.

"I asked [the officer] if he could lower the fine or nolle prosse [drop] the ticket," said Davis, adding that it was "the first and last time I ever did anthing like that."

Donovan, Davis and the other council members downplay the effect that the ticket-giving had on their decision to abolish the police department. They say they did it strictly to provide Chesapeake Beach with a higher quality police force in the form of the state police.

Murray, Donovan charged, would not work nights, and had used a police cruiser to go back and forth between his home, about eight miles away, and work. In addition, Murray wanted a hot line installed in his home, which at a cost of about $110 a month, Donovan called "a ridiculous waste of money in a town of 1,500 people."

The council also claims it was concerned about the large turnover of men under Murray - eight in the past year and a half, according to Councilman Roland (Yogi) Sweeney, who is also the police commissioner.

Murray, a tall muscular man with a ruddy complexion who came to Calvert to raise horses, said when he took over the police department, he had to strip one of the town's three police cars to provide parts for the two other cruisers. He couldn't find any matching police uniforms. Police revolvers were misfring on the range.

In addition, Murray initially was a chief with no officers, since all of the officers who had worked under the previous chief had quit en masse prior to Murray's appointment.

Fred Lynch, an officer who quit, said the men were tired of taking orders from the council, "If you pulled someone over who was a relative or friend (of a council member), the next morning you'd hear about it."

Murray's dispute with the council is far from over. The citizens have had their petition for a referendum successfully validated with 139 signatures - one-fifth of the 651 registered voters. It is up to the council now to set the date for the referendum.

The council wants to postpone the referendum until the 1980 election. That will give people time, they say, to see what a good job the state troopers can do. CAPTION: Map, no caption, By Richard Furno - The Washington Post