Los Osos general manager’s days appear to be numbered

December 6, 2015
Kathy Kivley

Kathy Kivley


Following a review of Los Osos Community Services District General Manager Kathy Kivley’s performance and an investigation into misappropriation of funds, Kivley spoke with legal counsel and quickly left the Dec. 3 board meeting.

A CalCoastNews’s analysis of district payroll found 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 permits, documents show.

In addition, a recent audit of the district found Kivley engaged in questionable accounting practices during her first year on the job. San Luis Obispo County Auditor-Controller Jim Erb sent a letter to Los Osos board members saying the findings of the audit should be of great concern to them.

In October, the district board voted in closed session to hire Jim Gardiner to examine the allegations that Kivley misappropriated district funds.

Before the closed door session to review the audit, Director Louis Tornatzky’s wife, Lynette Tornatzky, blamed CalCoastNews and local activists for Kivley’s problems.

After the closed door session, district legal counsel Mike Sietz asked Kivley to speak to him at the back of the room. Kivley then grabbed her purse and left.

At the end of the meeting, Los Osos activist Julie Tacker, who first discovered the alleged financial wrongdoings, spoke with Seitz.

“Seitz told me that Gardiner had found the same financial irregularities that I had found,” Tacker said.

At the end of the closed session discussion over Gardiner’s report and Kivley’s performance, the board reported no action. It is expected the board will call for a special meeting in the next few weeks to finish the discussion into Kivley’s continued employment.

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I agree with MaryMalone she needs to prosecuted. I am sure the amount of the loss is an amount that makes it a felony. She needs to be stopped. Prosecuting her would leave a mark on her and she would not be able to obtain another job. Her career is over.

The problem is that she is so cocky and so sure of herself that she never thought that she would get caught.

She has always been under the impression that she can do anything she wants and the way

she wants it whether it be right or wrong.

She is such a control freak and look what happened. She needs to be knocked down a peg and prosecuting her would her would do it.

She needs to come down off of her high horse.

The loss is even greater for what damage she has done to the financial information that she has totally messed up. The recovery will be costly to the LOSOSCSD.

With all the talented people around here, why o why can’t we find honest, qualified personnel for these sensitive government positions?

“… all the talented people around here…”

Unfortunately, your rhetorical question begins with an erroneous assumption. Remove that assumption, and your question answers itself.

When the public engages and asks questions it is amazing what is learned.

It’s a sad state of affairs when we can’t trust our public officials to right by us, but we see it time and time again. The bad news is almost non-stop these days.

We are always fortunate when locals care enough to be involved, look what turns up!

To add to Julie’s 12/7/15 post at 6:35a

When Julie first asked for Kivley’s payroll records, the documents had redactions, as one would expect, for confidentiality purposes – social security number, address, etc. Completely standard fare.

In my opinion those first waves of documents were slightly over-redacted but enough information needed to recreate Kivley’s ongoing compensation was available and that’s how I could confidently ascertain her abuse of overpaid benefits and compensation.

As our analysis was being worked on, payroll was, obviously, continuing to be earned so Julie continued to request the latest pay stubs.

Attorney Seitz got involved at this point and began to redact so heavily that there was, literally, nothing useful left to work with. His redactions went far above and beyond removing confidential information and dove into the world of hiding public information.

Why is Mr. Seitz going out of his legally justified way to obfuscate public information and aid Ms. Kivley in her theft of public funds? Does the board know he is doing that? Does the board condone his behavior? These are questions the public should be asking and demanding answers to.

If the original documents were as inappropriately redacted as the most recent ones have been, Kivley’s overpayments to herself and abuse of her position would have not been found. Is the district’s attorney representing the ratepayers with his actions and decisions or is he perpetuating these aggregious actions of a thieving General Manager.

I think Seitz’s actions were more of covering his own @ss for his pathetic inability to perform the duties for which Los Osos’ residents pay him.

With Mike’s older brother, Jon, involved, it was easier to support a corrupt GM. Mike just isn’t all that smart, and it shows when he tries to “pull a Jon Seitz.”

The SSLOCSD sure hasn’t missed Seitz.

Let’s hope he loses his footing in other areas as well. He’s made a fortune off of billing for sub par services, all in an effort to keep himself and his buddies in power.


This situation cries out for outside intervention. There has not bee a SLO county Grand Jury investigation of the Los Osos CSD in years. I urge a local resident to file a complaint with the Grand Jury. Here is a link to the form, it must be filled out by hand and mailed in.


Today, after putting up with many long years of our LOCSD’s constant bickering , many folk in town think that a well-known country western song is a good metaphor for deciding whether to hold em or simply fold em and not just walk away, but run away.

As I recall, one of the three recalled board members complained afterwards that “Los Osos residents are not capable of governing themselves”. Perhaps he had some good foresight at the time.

Some have tried to close up shop after the recall & failed. But that’s not to say it couldn’t happen if anywhere near the large number (87%) that voted to form our CSD train wreck (to handle our nitrate problems), get on board & vote once again.

There is no sane economic reason to duplicate the services the County was providing prior forming our CSD.

The County is back in charge of our sewage system & hopefully that’s where it will stay.

The time is ripe for a vote to send em packing.

Mrs. Tognatzy constantly has defended Ms. Kivley. She cannot blame Julie T or this newspaper for exposing Ms. K.

I have often wondered just who is the board member – Mr. T or Mrs.. T.(?)

I also see Seitz is up to his old tricks again. Why did he hustle Ms. K out of there?

Well, Ms. K is keeping to her past record. What poor group will get her next? Evidently her past record before coming here wasn’t enough for LOCSD to not hire her…………..

This is too funny. This doesn’t hold a candle to the $$$Millions of dollars the recall board absconded with in 2006.

Fraud is fraud. I don’t care if Kively stole one dollar or one million dollars…she needs to be prosecuted.

You are right. I’m only pointing out the blatant hypocrisy exhibited by those who “allegedly” governed in 2006, and are Kively’s critics today. They too were thieves. You need to study up on your history of the LOCSD and it will become abundantly clear that people who live in glass houses shouldn’t throw stones.


The LOCSD Board confirms by means of its actions and lackadaisical attitude that it cannot be trusted. The absence of trust and accountability bids them GO, dissolve the CSD, and allow Los Osos residents to deal directly with the County with NO go-between. The stench of rottenness is intolerable and the insanity must stop now!


It’s funny that you posted the link to the story about Kivley’s raise last year. Funny in that Kivley had been giving herself raises all along, including her very first pay period. By Dec. 2014 she had taken 60 hours more than her contract allowed. Including “floating holiday’s,” a holiday that didn’t exist and administrative leave. Wouldn’t we all love additional paid time off?

By October of 2015 she had taken 124 hours that didn’t belong to her. But, she also convinced the board that their advisory committee meetings should be quarterly, instead of monthly, and by reducing her work load she was also giving herself a raise.

After the bad audit was presented to the board in September, some public discussion and the board’s questions, I became particularly interested in the discussion surrounding Finding 2013-2, Compensated Absences. The Compensated Absences report was missing from the 2013/14 audits’ consideration. This report shows the district’s liabilities associated with what is owed to employees for sick, vacation, and administrative leave time each has accrued. Kivley claims that the 2013/14 report was not retrieved from the districts software because of employee turnover; apparently no one knew to run the report at the close of that fiscal year. She then said the software was not capable of running a historical report.

I couldn’t help but wonder, ‘who would benefit from the report being irretrievable?’ So, on September 8th of this year, using the California Public Records Act, I requested the payroll record for General Manager Kivley. I enlisted the assistance of a payroll expert and dear friend, April McLaughlin, who helped analyze the data. On September 30, I wrote a letter to the board and presented the analysis that revealed that Ms. Kivley had overpaid herself nearly $6,000 over the course of her two year employ.

In my opinion, she’s stolen public funds. But the value of her days off pales by comparison to the value of the collateral damage she’s done due to incompetence. The books are a mess and it will take a good long time to unravel the “bowl of spaghetti” she’s made.

It’s December 7th and she’s still not gone.

Forgot to mention, Kivley gets a $400 per month car allowance. That’s on top of her $99,000 annual salary plus benefits.