Two local water districts recover from manager’s theft

Around 550 people in two Pikes Peak-area communities are paying a high price for the financial misconduct of a former manager.

Water bills have skyrocketed in the Cascade Metropolitan Water District, in El Paso County, and the Arabian Acres Metropolitan Water District, in Teller County.

“To have a water bill triple within a couple of years, it hurts,” said Janice Eder, a Cascade customer. “I can afford it, but we have a lot of seniors on fixed incomes. It hurts the resale value of our homes.”

Water bills increased during the tenure of Terry Malcom, 66, who managed both districts. Cascade has around 400 customers, and Arabian Acres has nearly 150.

Two weeks ago, Malcom avoided a trial by pleading guilty to three counts of felony theft and was sentenced to 18 years in prison.

According to previous reports, Malcom stole around $1 million from the two districts — $200,000 from Arabian Acres, half of the stolen amount was a loan to the district to drill new wells, and the rest from Cascade, including a $100,000 state loan for upgrading its water system.

Customers said their average monthly water bills have increased from $60 to $100.

“Some people blame the former board, and I do not, knowing what (Malcom) did,” said Marilyn Callan, an Arabian Acres customer. “It is unfair, but life isn’t fair.”

What especially frustrates customers is that Malcom did it before. His prior criminal record includes convictions for bank embezzlement in 1997 and forgery in 1998, both while in Nebraska. He served some prison time and was placed on probation that ended in 2007.

Malcom still owes several million dollars of restitution in those cases. His latest sentence orders him to pay $1.1 million in restitution.

Malcom was hired by P.J. Anderson, former owner of the Cascade Public Service Company. Anderson previously said he didn’t know details of Malcom’s past and was unaware of missing money until it was too late.

Colorado Springs Utilities, which has provided Cascade with water since 1990, will take over the town’s water management and distribution, if the town completes necessary infrastructure improvements.

Cascade obtained a $5 million revenue bond to help finance the work and pay off debt. Some of the infrastructure dates to the late 1800s.

“I think some of it is made of wood,” Eder said.

Arabian Acres hired a management firm after Malcom left, but trouble developed when the district was unable to pay the firm because of the debt caused by Malcom.

“(The firm) did a good job and got us in better shape,” said Elric Winterer, president of the district. “But they were expensive, and they basically sued us when we couldn’t pay them. We had to increase property taxes to pay $116,000 we owed them.”

The district has since hired a second management firm that Winterer said is helping the district make better financial progress.

Winterer said the district needs around $2 million in infrastructure improvements.

“Not everyone is happy about this situation, but we all agree that we need to work together to resolve it,” he said.

Eder is less confident about Cascade.

“This debt will be here long after I’m gone,” she said.