Los Osos CSD parts ways with its general manager
January 8, 2016
Embattled Los Osos Community Services District general manager Kathy Kivley will retire at the end of January, following a settlement she reached with the CSD board. The district board decided to part ways with, but not fire Kivley after an investigation into district funds she allegedly misappropriated.
Following a closed session hearing Thursday, district counsel Mike Seitz announced Kivley will remain on administrative leave until her retirement on Jan. 31. Seitz said the terms of the settlement are confidential, but both Kivley and the district agreed not to sue one another.
In October, the district board hired private investigator Jim Gardiner to examine allegations that Kivley misappropriated district funds. The investigation followed a CalCoastNews analysis which found Kivley had been collecting pay for more administrative leave days than her contract allowed. She had also been receiving more holiday pay than her contract permits, according to district payroll documents.
On Thursday, the district board approved a $5,000 payment to Gardiner for the investigation. The district has not disclosed Gardiner’s findings.
In addition to the allegations of misappropriation of funds, a recent audit of the district found Kivley engaged in questionable accounting practices during her first year on the job. In response to the audit, San Luis Obispo County auditor Jim Erb sent a letter to Los Osos board members saying the findings should be of great concern to them.
Kivley has been on administrative leave since Dec. 4. Kivley’s contract states she is eligible for a two-month severance package if she is fired without cause. By spending most of December and January on administrative leave, Kivley is receiving approximately the same amount of pay she would have been owed if the board let her go without cause.
During public comment at Thursday’s meeting, most speakers called for the board to fire her with cause.
The Los Osos board hired Kivley in 2013 after she falsely stated on her job application that she had never been terminated. Kivley was previously fired from the positions of Atwater city manager and Clearlake city administrator, according to media reports.
The board appointed utility manager Margaret Falkner as interim general manager. The board has yet to discuss the hiring process for a new full time general manager.