Los Osos CSD parts ways with its general manager

January 8, 2016
Kathy Kivley

Kathy Kivley

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.


Seitz is completely wrong, the terms of the settlement are NOT confidential for Public entities. Any Public Entity attorney should know this. What a blowhard. He either doesn’t even know the law or is violating the law. Either way he needs to go! Julie, please obtain the settlement agreement so the public knows the terms and then get this guy fired. Please.


Can you cite which law states this information is not confidential?


The California Public Records Act, commencing at Section 6250 of the Government Code states that any qualifying records must be disclosed unless a specific provision of the Act or other law exempts them from disclosure.

Settlement agreements are not exempt from disclosure under the Act. Register Division of Freedom Newspapers v. County of Orange, 158 Cal. App. 3d 893, 909 (1984); Copley Press, Inc. v. Superior Court, 63 Cal. App. 4th 367, 376 (1998); Sanchez v. County of San Bernardino, 176 Cal. App. 4th 516, 526 (2009).

Seitz is probably trying to use an exemption under the PRA that government agencies need not disclose “[p]ersonnel, medical, or similar files, the disclosure of which would constitute an unwarranted invasion of personal privacy.” Govt. Code Section 6254(c). Yet even if that is the case, LOCSD must disclose the agreement with the exempt material redacted. Govt. Code § 6253(a) (“Any reasonably segregable portion of a record shall be available for inspection by any person requesting the record after deletion of the portions that are exempted by law.”).

In addition, “Where complaints of a public employee’s wrongdoing and resulting disciplinary investigation reveal allegations of a substantial nature, as distinct from baseless or trivial, and there is reasonable cause to believe the complaint is well founded, public employee privacy must give way to the public’s right to know.” (Bakersfield City School District v. Superior Court of Kern County, 118 Cal. App. 4th 1041, 1045 (2004)). In LOCSD, the Board undertook an investigation that resulted in the Board taking action against the employee, therefore the settlement agreement and investigation report must be made public.

As I said Seitz is a blowhard and also a Bully for not disclosing documents the public is entitled too.


The LOCSD should give serious consideration to following Jim Hill’s lead at the SSLOCSD and cutting Seitz loose.


The worst of Seitz’s sins is his inability to do his job. He just is not up to it.


MBwaiter, when you say, “In LOCSD, the Board undertook an investigation that resulted in the Board taking action against the employee, therefore the settlement agreement and investigation report must be made public,” how does that jive with the fact that the investigator was looking at alleged game playing on an office computer and $6,000 or so of alleded wrong paycheck payments? Does what is being investigated reach the bar of “substantial nature, as distinct from baseless or trivial?”

How is this a “disciplinary investigation?” How is a SETTLEMENT (which is what happened here) an “action” against the employee IF (and I am guessing here – no facts to back this up), IF, for instance, the employee wanted out of the employee’s contract?

We do not know both sides of this do we? I see that there is a big push to ruin a person’s reputation , but really, this is being made out bigger than it actually is in my opinion.


The Board of Director got exactly what they paid for, a piece of shit. They knew when they hired her that she was fired at Atwater and Clearlake: 1) everyone was telling them at the local level and 2) if they can read they could have read what everyone else was reading.

This is not her fault. she was actually very sucessful fooling the incompetent Board. It is the Board that should be fired starting with Mr. Seitz. How much are we going to keep paying him for costing errors, mistakes, and handling of business be it this district or several others in the County. He has cost the ratepayers a lot of money and is making a mint on the backs of the hardworking honest citizens. We don’t even want to waste anymore time talking about Lynette Tornatzky (sidekick of Bruce Gibson) and her husband, Lou, who is on the Board. Shame on all of you!


Ding,ding,ding, we have a winner here. You are 110% correct in that the ONLY one who is making out on these circus acts of hiring and firing Seitz. From reviewing the job duties to writing up the termination or settlement agreements, its Seitz. This sack moronic sack of excrement has cost this county a kings ransom. I’ll say it again, from Ca Valley to the San Dist, to the LOCSD and much in between it always Seitz as so called legal council supposedly protecting the public’s best interest.


Only in government service can you get caught stealing and lying and be rewarded, what a wonderful country we live in. Government of the government for the government and by the government. Yet when people go to the polls they continue to vote for more and bigger government?


but we are always told they work so hard, long hours and have to deal with such bad people and they deserve the high pay, benefits and pensions for life.


Nice that they are going to leave her with pay until the end of the month until she can retire.

Steal and get rewarded, what a great deal, NOT!


Same story different faces. She lies cheats steals and gets rewarded by her handlers. Politics as usual. Number of officials looking out for taxpayers? Zero! We are being continually robbed and not one decent person in the system is willing to say enough! Who decides to let her escape prosecution? How f–King kind that she agrees not to sue anyone for abusing her unchecked power to steal. Kivleys handlers want us to believe they are sparing us a court battle and an expensive trial? I for one would love to see my already squandered money go after all the swine at the trough. Is there not one person willing to stand up to this never ending corruption ring? Whoever made this decision is just as guilty as Kivley. These cushey contracts given to officials that protect misconduct are a good starting point. These have built in get out of jail free waivers for criminal conduct. Her superiors are just as guilty of public betrayal. Who is looking out for us? Lying on her job application is supposed to be reason enough to fire her. The fact that staff was too lazy To check her application references is another reason that they should be held accountable. Who hired Kivley? Simple question. Not one straight answer.


I would say that she got herself a great deal. Not only did she get payment for ‘administrative leave’, she got to call her leaving ‘retiring’ – not being fired.

I would really like to see what kind of a recommendation she will get when she next applies for a job. Great employee? or the truth – she was fired in all but the words.

If Seitz gives her a recommendation (when and if it comes) I’ll bet it will be a glowing report.


You can’t ask if an employee has been fired, and she does not have to reveal it. But a gag order is very telling of the situation and the departure was not on good terms.


Lets see, that’s how many managers since the LOCSD was formed? This should be proof that a CSD form of governance is NOT good for Los Osos.

It’s time for the community to STOP reinforcing failure

Mr. Holly

I want a government job with all of the benefits and perks so that I can pilfer their piggy bank. Then after getting caught settle for a cash settlement instead of getting fired and revealing how corrupt the system is.


“Private” lawsuit settlements involving public money should NOT be confidential. Any lawyer out there willing to sue the LOCSD for the information?


They are not confidential by state law. Seitz is wrong.


Terminate Seitz!


Jim Hill’s firing Seitz was one of the most positive measures seen by the residents of AG in a long time.