A Palmer Lake couple is accused of secretly tapping into the town's water system and draining millions of gallons through a buried pipe while residents lived under strict drought-era watering limits. Terry Paul Tolbert and Katrina Deanne Tolbert were arrested and accused of diverting water from the municipal supply to their property off Highway 105, according to police records.
Investigators estimate that 4,028,393 gallons went unbilled between November 2023 and October 13, worth about $36,131, according to KRDO. The station reports that police records describe the couple diverting more than 4 million gallons of water from the Town of Palmer Lake through a buried pipe running to their property. An investigation led by the town, the 4th Judicial District Attorney's Office and El Paso County found that the pair stole the water over a three-year period, and as reported by Colorado Public Radio, police believe the water was used for irrigation and livestock. The Tolbert property is reportedly home to the family farm and the Tovah homestead business.
The alleged scheme surfaced only after Palmer Lake tightened its oversight of a strained water system. The town installed a separate meter on the line serving the Tolbert property on August 27, and the same meter recorded 173,320 gallons between September 14 and October 13, while the household meters on the property recorded just 7,900 gallons combined over that same stretch, per the station's report. Investigators said a pipe from the connection ran to irrigation fixtures and a yard hydrant.
A Town Already Rationing Every Drop
The discovery came as Palmer Lake grappled with a worsening water shortage of its own. A water department audit showed monthly losses climbing from a few hundred thousand gallons to more than 1 million in October 2025, and the losses stayed high even after crews found and repaired several leaks, the same account notes. The town declared a water emergency and imposed Stage 1 restrictions that took effect August 13, according to KOAA.
Those restrictions limited outdoor watering to Wednesdays between 6:30 and 7:30 p.m., using only faucet-filled buckets or watering cans of five gallons or less, KOAA reported. The station said the town's water superintendent attributed the crunch to Monument Creek running dry since mid-June, which left Palmer Lake unable to run its surface-water treatment plant and dependent on its A2 well, which draws from the Arapahoe Aquifer and had been producing water daily since late June. The superintendent said restrictions could remain in place until early next year if conditions didn't improve enough to bring the surface plant back online.
Charges and What Comes Next
Terry Paul and Katrina Deanne Tolbert were charged with endangering a public utility, theft, criminal mischief and second-degree criminal tampering with a utility meter, per KRDO's report. Terry Tolbert owns Mission Plumbing & Heating and holds a master plumbing license, according to the company's website. A hearing advisement is scheduled for November 20, and the couple are set to make their first appearance in El Paso County court on December 3, Colorado Public Radio reported.
Palmer Lake officials framed the case as a broader threat to the town's infrastructure. According to The Gazette, the town said updated procedures, enhanced monitoring and improved meter verification helped uncover evidence of the alleged theft, which officials said occurred while Palmer Lake was under water-emergency restrictions. The Gazette also reported that the town said unauthorized tampering with a public water utility raised concerns about system integrity, public health and safety, including the potential for contamination.
Residents Feel the Squeeze
Palmer Lake had already raised water usage rates to $0.93 a gallon this year, with the average homeowner now facing a water bill of around $400 a month, according to Colorado Public Radio. Patrick Davidson said some residents are angry about the water issues and the possibility that someone wasn't following the rules, though he said rates will not rise because of the recent theft allegations.
Davidson said internal auditing and investigative work helped identify the sources of some leaks as the town worked to minimize losses across its system, and that increased monitoring came in response to ongoing water demands across Colorado. He said the town would continue its efforts to monitor and steward its water despite the incident. Elsewhere in the state, the Colorado Attorney General's Office and a district attorney announced felony charges in August against a Denver man accused of interfering with a public water system that supplies drinking water to communities, according to the Colorado Attorney General's Office.
