Should Los Osos dump Wallace and Seitz?

January 24, 2016


On Sept. 30, it was brought to the attention of the Los Osos Community Services District (LOCSD)  Board that General Manager Kathy Kivley had overpaid herself. This was less than a month after independent auditors would not give an opinion on the districts books reflecting her first year as the district manager.

Kivley had made illegal journal entries, overpaid staff members, overpaid herself by thousands of dollars and failed to provide reports that the auditor could qualify. Upon reading the audit and speaking with the independent auditor, on Oct. 7 County Auditor Controller Jim Erb wrote the district a letter raising many concerns that still haven’t been responded to.

It wasn’t until Oct. 12 that the board met to discuss Kivley’s performance after overwhelming evidence had been presented. Her contract gave the board many outs to sever ties cleanly and easily, yet they chose to hire a private investigator to drag out the inevitable.

The private investigator, former San Luis Obispo City Chief Jim Gardiner, never completed his report.  It is unknown if it will ever be completed and/or released to the public who, to date, have paid this friend of LOCSD attorney Mike Seitz $14,000 to investigate the $6,000 allegation.

At the same time, they’ve paid Seitz his hourly rate to oversee the investigation and offer a confidential/conditional settlement to sever ties with Kivley.  A complete waste of monies.

It took tenacity and energy to force Mike Wright and Marshall Ochinsky to remove Kivley, but not until paying her $10,000 to leave our community. This is a person they were warned about, her previous jobs and how she was fired from the previous two. They agreed that she lied on her job application, but still hired her and after a year gave a bonus and 10 percent raise.

Kivley’s performance as a manager has been an issue since her hire, but for board members to cover for her and lie just adds to the mess that is the LOCSD.

In the 15 years since the creation of this waste of a district, the LOCSD has hired at great costs 15 general managers and has fired most of them. No person can see this as a success.
Now Mike Wright and Marshall Ochinsky want to bring back a general manager they already let go. How would Einstein explain this?

Now information has come forward, giving evidence of malfeasance and extortion, by the district engineering firm Wallace Group and legal council Mike Sietz. There is now a request for criminal investigation into Wallace and Seitz.

Mimicking so many other agencies in our area, the LOCSD has purposely used these firms for guidance and assistance for the last 17 years. Never reviewing there contracts or quality of opinions.

We have overspent and wasted tens of millions of tax dollars due to Sietz and Wallace’s constant failures. All of the directors have been in bed with these firms. Why? Because we have been incapable of electing honest directors. Mike Wright and Marshall Ochinsky are just the latest, but also the worst.

There many other agencies that no longer use either Seitz or Wallace Group, is it not appropriate to  reevaluate these contracts?

California codes have been broken. Logic  forces us to realize the terrible direction put forth by Sietz and Wallace. Mike Wright and Marshall Ochinsky both have a personal stake in keeping both Mike Seitz and Wallace Group’s Rob Miller.

Why do we need complete failures and dishonest contracts in Los Osos? We have enough problems of our own without these companies. Please contact the LOCSD and force Wright and Ochinsky into becoming honest elected officials, I am disturbed by there rampant dishonesty! While we experience the failures of our government, we are bound to repeat history by setting up another failure and each time we will pay.

Tom Salmon is a longtime Los Osos resident with 35 years of expertise in statewide public infrastructure.

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The rape of the taxpayers goes on and on and on…

“The private investigator, former San Luis Obispo City Chief Jim Gardiner, never completed his report. It is unknown if it will ever be completed and/or released to the public who, to date, have paid this friend of LOCSD attorney Mike Seitz $14,000 to investigate the $6,000 allegation. ”

Why was Jim Gardniner, a private investigator, hired to review and audit financial records?

He was paid $14,000 to investigate this matter and has yet to complete it and present it to the Board of Directors who represent this people. The Oceano CSD hired for their investigation Knudson and Associates (Knudson has testified as a Certified Fraud expert in more than 50 federal and state trials and proceedings), Knudsons made suggestions regarding district operations and procedures, presented a full scale report (123 pages), conducted interviews with Wallace employees, attorney and spouse, prior employees, whistleblowers, a review of approximately 40 boxes of mismanaged and incomplete records.

What did we get: a retired police chief, drawing a $150,000 pension, no formal accounting

experience, who has not completed his investigation, no report of the facts, and a bill for $14,000 and a bonus to Kivley after Seitz and Gardiner made some internal private decisions.

This was another lost for the taxpayers.

How much of Seitz and Wallace is this County can to tolerate.


None of the Wallace Group employees were interviewed by investigator Knudson because John Wallace required that they have Wallace be in attendance.

Intimidating? Nah. Knudson weighed the benefit and saw no reason to listen to forced submission.

This will not be the case for law enforcement. Bring on the depositions!

Wallace had the San District employees in his hand. He loved to smugly ask them “How much do you love your benefit plan?” to employees with disabled children.


In response to your Public Records Request of January 8, 2016 and received by the District on January 11, 2016, to “provide the Gardiner report”, the District has no documents responsive to your request as no final report was prepared. All work done was directed by District’s General Legal Counsel. Any documents subject to that investigation are covered by attorney-client privilege and attorney work product privilege.

Jim Gardiner should return the $14,000 for the job he didn’t do. But, he won’t, he’s a pension government employee who is boasting his social security check to go with the pension. Government employees, working or retired, never get enough and notice where they go, back to the trough that keeps feeding them. Shame on you, Mr. Gardiner I think you are disgusting.

For more on corruption in SLO County, go to:

There is no longer any just economic reason to finance & maintain a LOCSD.

The sewer plant is now built out of town & downwind. Just go and visit the “monstrosity” & thank County Planners for their foresight to build it out of town

The reality is that many in town are dissatisfied with costly inept CSD representation & have been for a long time.

But the “many” you speak of must not be a voting majority or at least a majority of those willing to vote in a given election, otherwise this “many” would dissolve the LOCSD, right?

kayaknut …..On the contrary, the “‘many” I speak of are in fact ‘voters’ & business folk with good common-sense, not unlike the ‘voting’ town-folk that refused to have a park & sewer plant “blended together” upwind of our businesses.

Was it not voters that voted the “short-sighted” directors out of office because they insisted on installing a stinky crap-factory upwind of our town and community hall, even after being told in writing by our state water board that it was a BAD idea?

We have been skinned-alive (like bad poker players) for decades, by costly bad in-game decisions.

Its past-time to seriously consider folding rather than permit them to dump more of our money into the pot.

With respect to the ‘non-voters’ (renters) you mentioned. Many business owners (some are also renters) seriously believe they are in fact an important part of our Community make-up, not to be ignored.

OK, maybe somebody can explain this to me: When the County came up with their sewer in the 1990s, 87% of the town voted to do something else, they didn’t like that type of traditional sewer. Then when the County got the sewer project back after Tr-W failed, everyone whined and complained about that new project – even trying to stop it at the Coastal Commission a few months before the digging started. The CSD inherited a broken down water system (which is mostly fixed); the County allowed all these homes to be built on septic tanks with no infrastructure and never planned for all of the saltwater intrusion into the aquifer which has seriously endangered the water supply. Now, WHY are people wanting to dump the CSD and go back to —— the County!!

Please, SOMEBODY, explain why this seems like a good idea?

Well, if history means anything, the county, like it or not, is the lesser of two evils. Initially, they created the problem and ultimately they were forced to solve the problem.

The LOCSD’s have been a huge failure and frankly should be abolished.

I’m sick and tired of the public advocates being made out as the bad guys.

They stick their necks out and attend meetings that bore the hell out of most of us.

They keep at it and… What do you know?

They are often right.

Elected officials need to represent all their constituents and especially the minority view.

My God! Who wants to go to a sewer meeting?

Off course they knew someone was taking off with boatloads of money!

No wonder Ferrara left town.

Otherwise he would have had to stay home on self inflicted house arrest!


Lets get rid of the CSD and that will solve many problems, granted it will create a few also but not near as many or as concealed.