Los Osos CSD, general manager to part company

Kathy Kivley
Kathy Kivley SanLuisObispo

The tenure of embattled Los Osos Community Services District General Manager Kathy Kivley has come to an end.

Kivley and the district’s board entered into a confidential settlement agreement at Thursday’s board of directors meeting.

She will remain on administrative leave until Jan. 31 and then plans to file for retirement, said Michael Seitz, the district’s attorney.

The agreement releases the district and Kivley from filing lawsuits against one another.

Kivley has been under fire for her job performance for several months. An independent audit of the district’s 2013-2014 fiscal year, made public in September, determined that proper district oversight was lacking. The audit found that bookkeeping entries were difficult to track, that Kivley changed many original entries, and that vacation and sick pay were inaccurately reported with at least two employees receiving overtime pay for work done during normal business hours.

In addition, the district hired investigator Jim Gardiner in October to look into whether Kivley took unpermitted time off and used her work computer for personal activities.

Kivley was placed on administrative leave in early December.

Seitz said that Gardiner’s inquiry wasn’t completed and the board met to discuss Kivley’s future employment status before it was put into any formal report. Seitz said the total amount paid by the district to Gardiner was about $14,000.

“The board reviewed all of the circumstances related to what was alleged, as well as her (view) related to the investigation against her and other matters,” Seitz said. “The board decided that a settlement was in the best interest of the district.”

Margaret Falkner, a district utility compliance technician, will step into the interim general manager role until the district finds a permanent replacement. The board expects begin the process of selecting a new general manager in the next few weeks.

“I’m looking forward to moving forward,” said Jon-Erik Storm, the board’s vice president. “I think it’s time to move on and make the best of everything. I’m looking forward to the new year.”

An independent audit of the district’s 2014-2015 fiscal year is expected to be released within the next month.

Julie Tacker, a former Los Osos CSD board member, who has been one of Kivley’s biggest critics as a member of the public, said that Kivley should have been fired for cause.

“I’m disappointed, not upset, that once again the district has failed to find a strong leader that has its interests at heart,” Tacker said in an email. “. ...I would like to see a professional with a background in complex water issues manage the LOCSD. ...they are entering into a new realm with the Basin Management Committee and need to be especially savvy at this time.”

Kivley did not respond to requests for comment sent to her district email. She didn’t immediately respond to a request sent Friday afternoon.