Big-city problems have beset the tiny town of Colmar Manor.

Crime, embezzlement of municipal funds and a declining tax base are the issues in Monday's election of a mayor and two council members for the community of 1,350 persons.

Mayor Edward M. Mutchler, 56, a warehouse manager, is running for a fourth two-year term against Charles J. Kenny Jr., 31, a business teacher at DeMatha High School.

Kenny, a former council member, opposed Mutchler in 1977 and lost by 58 votes. This time, he said, he is confident he will unseat the incumbent.

"People in this town want an honest and responsive government," Kenny said. "People here are looking for a change. They recognize that there are serious problems."

He told the 75 residents gathered at a candidates' forum sponsored by the Colmar Manor Citizens Association this week, "Colmar Manor is destined to collide with an iceberg. I would like to save it."

Kenny and council candidates Cora B. Wood and Joseph A. Anthony blame the current administration for the problems created by Charles Beauchamp. As town administrator, Beauchamp allegedly diverted about $45,000 of the Colmar Manor's rent and tax receipts to his own personal account.

Beauchamp, who pleaded guilty in federal district court in Baltimore to one count of interstate transportation of stolen property, will be sentenced May 13. He also was indicted on 14 counts of mail fraud.

Kenny says he was "hoodwinked" by Beauchamp, whom he befriended and made godfather to his child. He says what distresses him most is that town lawmakers did not check Beauchamps' references before he was hired as a clerk and then promoted to administrator.

Had this been done, Kenny said, they would have discovered Beauchamp came to Colmar Manor after having served 29 months in a federal penitentiary for embezzling $1.5 million from a New York credit union.

Anthony charges that town leaders violated the Colmar Manor charter when Beauchamp was moved to the post of town administrator.

"Why wasn't he bonded?" Anthony asked. "He should never have been able to touch the money."

Kenny, Wood and Anthony also criticized Mutchler and incumbent counicl members Ruth V. Merkle, 60, who has served since 1972, and Benjamin Reading, 65, who has been on the council since 1977, for not making proper use of the $2.7 million in community-development block grants and small-city development funds the town began receiving in the early 1970s.

Mutchler countered that the town had accomplished much with the federal grants, including sewer and street repairs and low-interest loans and grants to homeowners for home repairs. He said plans for redeveloping Bladensburg Road, an eight-block stretch of mostly vacant land the town wants to sell for private commerical development, were proceeding smoothly.

Mutchler admits the town was "duped" by Beauchamp, whom he and other townspeople recalled as "an affable guy." Mutchler said the town is recovering from the effects of Beauchamp's activities, and added, "It's the opposition that keeps bringing it up. We're getting back on our feet."

He said the town plans to sue Beauchamp to recover the lost money. He also said Colmar Manor will be reimbursed for most of the loss by its insurance carrier.

But Anthony sharply criticized the plans for federal funds. He cited a recent letter from the Department of Housing and Urban Development criticizing the handling of grants and instructing the town to make changes in the program's administration.

"I never intended to seek political office," said Anthony, a 40-year-old Metro train operator. "But what I see going on has made me so frustrated."

He called the incumbents "good, honest people," but called them ineffective as managers of this town. We might be a little town, but Colmar Manor got into big business when millions (in federal aid) started coming through here."

Council Candidate Andrew Rocker declined to speak at the forum, saying he had not had sufficient time to prepare.

The other two council seats will be up for election in 1982.