Los Osos GM overpaying herself, payroll shows

October 1, 2015
Kathy Kivley

Kathy Kivley


In less than two full years on the job, Los Osos Community Services District General Manager Kathy Kivley has overpaid herself by more than $4,000, the CSD payroll shows.

A recent audit of the district found Kivley engaged in questionable accounting practices during her first year on the job. The auditor also found the district disbursed extra overtime pay to at least two employees.

The audit did not examine Kivley’s earnings, though.

An examination of the district’s payroll shows Kivley has been collecting pay for more administrative leave days than her contract allows. She has also been receiving more holiday pay than her contract allows, documents show.

Kivley has not responded to multiple email and phone requests for comment. On, Wednesday, former district board member Julie Tacker sent a letter to the board informing the members of the financial discrepancies she had discovered while researching payroll documents.

Since taking over as general manager in Oct. 2013, Kivley has overcompensated herself by approximately $4,362, according to a CalCoastNews analysis of the CSD payroll. When including additional violations of her contract, Kivley appears to have over paid herself by nearly $6,000.

According to Kivley’s contract, she was allowed five administrative leave days per year at a cost to the district of $1,731. In her first year as Los Osos general manager, Kivley took 11.5 days of administrative leave, for which she was paid $3,981.

At the completion of her first year in Los Osos, Kivley received a new contract and a corresponding bump in base salary from $90,000 to $99,000. Some of the terms in Kivley’s contract changed, but both her first and second contracts limit the amount of annual administrative leave to five days.

Over the course of her second year on the job, Kivley has taken six days of administrative leave. Her second full year with the Los Osos CSD ends next month.

Thus far In her second year, Kivley has received $2,284 in administrative leave pay. Her current contract only allows her to receive $1,904 in administrative leave pay for the entire year.

Also, both contracts state Kivley cannot take administrative leave until 90 days after the contract takes effect.

In her first year, Kivley took 4.5 days of administrative leave during her first 90 days on the job. Over that period, she received $1,557.70 in unsanctioned administrative leave pay.

CalCoastNews did not include that figure in its conservative accounting of Kivley’s overcompensation. When included, Kivley has overcompensated herself by approximately $5,919 through her first 22 months in Los Osos.

By taking extra administrative leave and holidays, Kivley has been able to take paid time off without counting it as a vacation. Kivley can accrue unused vacation pay and cash it out when her tenure with the district ends.

Through her first 22 months on the job, Kivley accrued 88 hours or approximately $4,189 of unused vacation pay.

Last month, auditing firm Moss, Levy and Hartzheim completed an audit of the Los Osos CSD’s accounting for the 2013-2014 fiscal year. In addition to revealing improper accounting practices and wrongful overtime payments, the audit found the district’s vacation and sick time balances were the same as the previous year. That indicates a likely inaccuracy, according to the audit.

Kivley had an active role in the accounting errors, according to the audit.

The district’s accounting was difficult to track due to a large number of journal entries made, many of which were cancellations of previous entries, the audit states. Many of the adjustments to journal entries were made directly by Kivley.

Kivley should not have made entries in the ledger, the audit states. Rather, the entries should have been made solely by the district accountant, with Kivley signing approval of them.

Separation of accounting duties is necessary in order to prevent someone from concealing any misappropriation of assets, the auditors stated.

In 2013, the CSD board hired Kivley even though she falsely stated on her job application that she had never been terminated.

Prior to moving to Los Osos, Kivley served as the city manager of Atwater in Merced County. The Atwater City Council fired Kivley in September 2012, less than a year and a half into her four-year contract.

At the time of her firing, Atwater had a projected negative $3.7 million general fund balance, according to a report by the Merced Sun-Star.

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This woman is what’s really wrong in America. There are far too many government employees who are gaming the system for personal benefit and far too few who genuinely enjoy doing good work. We the people need to force our elected officials to stop hiring these morons and start writing contracts with severe financial penalties for acts like these.

The elected officials are the morons.


Government employment = license to steal.

Here that noise? It’s the people of Atwater laughing at us!

One of Kivley’s more outrageous contract provisions is a $400 a month car allowance.

Shame on the LOCSD Board for this ridiculous expense on the back of the ratepayers.

For $200 or less the district could own the vehicle…

Couldn’t agree more.

“…Overpaying Herself…”

Politics aside, from an Accounting Principles POV:

How Is EVEN Possible – It Defies basic (logic) controls; on NUMEROUS Levels, AND Checkpoints!

You are assuming the controls and checkpoints are there, existing and being enforced? Are you new to public employees and their antics?


My apologies, but I seem to be at a loss concerning the basis of utilizing the catty arsenal in your hit-and-run syntax.

Yes, as implied in my initial comment: I count on GAAP to be in place everywhere.

And since you brought it up, my expectations are not entirely the result of my education (MBA), and/or 30-yr financial background (Local, State, and Federal levels) – it’s just simple logic.

FYI – The (Federal) Accounting Standards (FASAB) Handbook covers GAAP, and is available online at:


Why is there even a LOCSD???

Oceano Community Services District


To a T

Bottom line, you get what you pay for and this was a bargain basement sale affair. Just read her employment history and then, which the Board knew about when they hired her, you you have to ask yourself why! This is just a losing proposition right from the beginning.

So how do you explain the OCSD? they pay $$$$$$$$$ and yet have a useless top dog. This can also be said for many government agencies, so shelling out big $$$$$$$$’s does not necessarily guarantee you a responsible person, and a reasonable salary doesn’t mean you get a worthless person, but unfortunately the government very seldom try’s that route. What it takes it the right people making the decisions on whom to hire and if those people are worthless than the amount of $$$$$ spent means nothing.

Go a step further. We are all taxed through the nose and get the crappiest, least-effective, most corrupt people “serving” themselves while trying to look noble and valiant (at least to their sycophantic colleagues). Occasionally throwing an actual decent person in the mix so it can never be said “100%” are corrupt and ineffective.

It’s a very old game, and quite incestuous when examined closely.

CSD’s don’t work! What happened to the millions of dollars of state revolving fund low interest loan money that the “recall” board refused to return when they defaulted on the sewer loan…and then declared bankruptcy?

Kivley is peanuts by comparison.

Yes Pelican – also, wasn’t there some $700,000+ bond payment money that went missing in 2006?

Who was on the LOCSD board then?

“Why do you see the speck that is in your brother’s eye, but do not notice the log that is in your own eye?”

Ted Slanders will love this quote!