Los Osos scrambles to pass a budget

September 3, 2015
Julie Tacker

Julie Tacker


In order to comply with state law, on Tuesday the Los Osos Community Services District held a special meeting to adopt their final budget for 2015-16. They did so reluctantly, with the Vice President Marshall Ochylski first asking what would happen if the board voted not to approve it? District Legal Counsel Mike Seitz was a bit baffled and answered “I don’t know” and said he had never seen the precedent.

Seitz went so far as to speculate doing so may trigger a Grand Jury investigation. Audience members murmured, “So be it” and “Bring it on.”

Three of the directors asked hard questions of the district’s General Manager Kathy Kivley, who vehemently defended her errors, suggesting these were governmental accounting practices. She insinuated the district had been doing things incorrectly before her hire in Oct. 2013, even though it had had clean audits in the recent past – and even as it went through its bankruptcy when its books were heavily scrutinized by the court.

After many months of excuses, the district’s fiscal year 2013-14 financial audit was just delivered, in it the auditor discusses 12 findings for concern.

Much of the board’s questions on this year’s budget were based on the findings in that audit and formulas she said came from the county the district has not used before. The district will have a presentation from their auditor at the regular meeting tonight, Sept. 3; it should be interesting to hear how the auditor’s answers differ from those given by Kivley.

In May, the Los Osos Community Services District properly published its legal notice a “date, time, and place when the board of directors will meet to adopt the final budget.” It was to have been adopted June 4; on that day the board heard the staff presentation, took testimony from the public and rejected the budget as prepared by Kivley. The board ordered that the information from the 2014/15 audit and a new tax revenue formula be included in a revised budget and brought back in September for adoption.

The board has been “continuing the hearing” to “the next meeting” at each regular board meeting since July and August. At the August meeting, during public comment, I expressed by disappointment that the district’s finance advisory committee was scheduled to meet on Aug. 31, and would not be able to have their comments or recommendation on the revised budget considered in time to comply with state law.

The code states, “On or before Sept. 1 … the board of directors shall adopt a final budget that conforms to generally accepted accounting and budgeting procedures for special districts.”

The finance committee agenda was posted for Aug. 31 and the revised budget wasn’t on their agenda at all. When asked why not, staff answered the preliminary budget had been considered at the committee’s May meeting. The finance committee met Monday night only to discuss the long overdue 2014/15 audit. When asked about the customary management letter, Kivley said she didn’t have time to write one. The strange thing is the auditor writes those, not the district.

Also, this past Friday, the agenda for the board’s regular meeting was posted with the 2014/15 audit and the 2015/16 budget adoption on the agenda. Seeing this, I again, brought the Sept. 1 state deadline to the attention of several board members in an email.

In an effort to comply with the law, midday Monday, the district published a special meeting agenda for Sept. 1 at the district office, but failed to post the revised budget on the website with the staff report. I telephoned the district office and advised them accordingly. The budget was finally uploaded to the website for the public to access for less than the required 24 hours before the special meeting.

The district never re-noticed the hearing for budget adoption. The Tribune published in their government meetings column the regular meeting for Sept. 3, highlighting adoption of the 2015/16 budget — that has now been removed from that agenda. The revised budget will have already been adopted for two days by then; so the public has been left out – again.

The public has had very little time to preview the revised budget and the special meeting was not televised for review on channel 20 or on the web.

Is the district hiding something? Is the general manager simply incompetent? Or both? This budget preparation – scheduling – noticing – posting blunder is symptomatic of the many other shortcomings of the district’s management. The findings in the audit of her first year at the helm are worrisome.

Once again, Los Osos, it is time to find a competent general manager.

Los Osos Community Services District meets tonight at 7 p.m. at the Sea Pines Golf Resort, 1945 Solano Street, Los Osos.

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Sometimes simplicity is best.

When we have problems like this, why can’t the budget be posted online for interested citizens to print, scrutinize, analyze, problem solve, and bring if interested to a “town hall” meeting? After all, it is THEIR money? If the city manager is simply incompetent, it will be there right in the budget. Maybe she put down 1000 for roads instead of 10000, I don’t know. City management isn’t MY expertize; but I as you smart people MIGHT have guessed, I am QUITE the talker. I have met some AMAZINGLY intelligent people in this county, maybe even readers here. People I encounter at the store, in line for coffee, at farmer’s markets, etc. People here have lived some really interesting lives, and have something to offer with regard to input. Let our citizens look at the numbers. If our leaders have not intentionally done something wrong, they should not be afraid.

How did she even get hired to begin with? She was fired as City Manager of Atwater in September 2012 due to fiscal mismanagement according to a newspaper article.


According to the article, after being fired Kivley said it’s too early to decide how to move she will move on. “Financially, I’m solid. So I’m not worried about that. That’s not an issue for me,” Kively said. “I just have to decide what I’m going to do, because I’m not ready to retire.”

But everything isn’t solid in Atwater as employees try to pick up the pieces from Kivley’s tenure, according to Planning Commissioner Fred Warchol.

“A heavy weight has been taken off of the shoulders of Atwater with the termination of City Manager Kively,” Warchol said in an email. “You can almost see it in the eyes of City Hall employees when they come to work now.”

“The thousand mile journey to our fiscal recovery has taken its important first step. Kively’s apparent lack of leadership has been devastating,” he wrote.

Did Los Osos check her references?

Great question! We are still scratching our heads. She failed to check the box on her application “Have you ever been fired?” When discovered, board members said, “she told us.”

Tonight’s audit presentation made it pretty clear that things have gone pretty screwy on her watch. The Board would not accept the report until that Management Letter is written. This is the letter she IS obligated to write, but she’s leaving for two weeks on vacation, some know it won’t be done for quite some time.

I had my references checked better when I worked in fast food as a teenager. It is mind blowing.

As I recall. this site wrote a great article about Ms. Kively and this whole situation. The Board decided to ignore all the facts presented, including the firing mistake on her application and hire her anyway. They got exactly what they wanted, another incompetent manager Says a lot about this board!

CSD’s don’t work. You are proof. Los Osos has failed miserably attempting to govern itself since 1998.

Poor L.O. These folks have been getting the shaft for decades. Honestly with all the bickering and other nonsense there, I would pack up and leave.