ORANGE COUNTY IN BANKRUPTCY : Cities Want Money Back on Stalled Radio Project--Now : Bankruptcy: $12 million invested by 14 municipalities for much-needed emergency communications system is mired in county morass. Several say they might sue.

Leaders of 14 cities have vowed to fight for the return of about $12 million they invested with Orange County for the purchase of a highly touted emergency communications system that has fallen victim to the financial crisis.

The county has placed the $84-million Motorola project on hold, in part because the money collected for the system is tied up in the bankrupt county treasury.

But city officials said they want the money back and have taken their case to the Bankruptcy Court’s creditors committee. A few cities even hinted that they might sue the county as a last resort to get their money.

“I’m angry,” said La Habra City Manager Lee Risner, whose city invested $626,000 in the radio network. “All of us should have all of our money (back) with no deductions. . . . We expect the county to come up with answers immediately. Now.”

Instead of answers, Risner and other city leaders said, they have received little or no information from the county about the status of the project, which would link all law enforcement, fire and public works authorities in the county onto one radio system. County officials did not return repeated telephone calls Friday.

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A total of 14 cities have money in a trust fund established by the county for the 800-megahertz system, said La Habra Police Chief Steven Staveley. Along with La Habra, they include Anaheim, Brea, Costa Mesa, Fountain Valley, Fullerton, Garden Grove, Irvine, Laguna Beach, La Palma, Los Alamitos, Placentia, Stanton and Tustin.

Seventeen other cities either were saving money for the project in their own accounts or planned to seek loans, officials said. The county planned to spend about $30 million on the system, which was expected to begin operating in 1997.

“There’s no question this is going to be a real uphill push” in light of the financial crisis, said Costa Mesa City Manager Allan L. Roeder. “The problem that we are confronted with is that we can’t just do nothing.”

The new network was set to replace a 23-year-old 400-megahertz system that officials said is woefully outdated.

“The system’s beginning to fail. It needs to be replaced,” said Staveley, chairman of the Orange County Chiefs and Sheriffs Assn. communications committee. “The current system has only 18 channels and it doesn’t allow police to communicate with fire or public works. The new system will give us 100 channels.”

The current network is overburdened with calls, and some officials fear that police and fire response times could increase if it’s not upgraded. Staveley said the outdated equipment slowed emergency efforts during the recent floods and the 1993 Laguna Beach fires.

“Essentially, the airwaves are too crowded,” said Sheriff’s Lt. Dan Martini. “We’ve increased the number of calls dramatically. There just isn’t enough air.”

The Board of Supervisors is expected to discuss the emergency radio system at a meeting later this month. Some officials expect the county to work with Motorola to craft a more modest plan that costs less but improves current service.

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Staveley said another option would be to rebuild the current network, at a cost of at least $40 million. But he warned that a rebuilt network would not be as effective as a new, state-of-the-art system.

Staveley and others also fear that if the county doesn’t act within the next few years, the Federal Communications Commission will take the channels set aside for Orange County and give them to other agencies.

City leaders said they still support upgrading the radio network. But until the financial crisis is resolved, many officials said, they want control of their contributions.

“We want the money back,” said Tustin City Manager William A. Huston, whose city has $635,000 in the trust fund. “When it comes time to pay up, we’ll pay up.”

The cities’ contributions to the system were being held by the county as a trust and should not be considered county assets by the U.S. Bankruptcy Court, city managers said.

“This is our money,” said Irvine City Manager Paul O. Brady Jr., whose city has about $2 million in the trust fund.

Tustin and several other cities are working with the bankruptcy court’s creditors committee in an effort to gain access to the funds. Officials hope to reach an agreement with the county for the release of all $12 million soon.

“I think all the cities feel we need to work together,” Huston added.

But if those efforts fail, Garden Grove officials said they will go to court to recover their $1.7 million.

“If we aren’t getting what we purchased, we want our money back,” said Garden Grove Mayor Bruce A. Broadwater.

Times correspondent Bert Eljera contributed to this story.