He is expected to decide at a court hearing later this month whether to accept or reject the offer.
Neither Mr. Hanretty nor his attorney, Michael Markowitz, could be reached for comment, but the Daily News reported that the attorney said it is very likely the offer will be accepted.
At a July 18 San Mateo County Superior Court review, prosecutors offered Mr. Hanretty a plea deal that includes the potential for state prison, District Attorney Steve Wagstaffe told the Almanac after the hearing.
Mr. Markowitz requested time to discuss the plea offer with his client, and a July 31 date was set for 9 a.m., Mr. Wagstaffe said.
He declined to disclose further details of the plea offer.
If the offer is accepted, Judge Mark Forcum will decide whether Mr. Hanretty will serve time in prison, Mr. Wagstaffe said.
A likely consideration in sentencing will be Mr. Hanretty's ability to pay restitution to the district, Mr. Wagstaffe said, adding that, so far, he has paid no restitution.
The amount of restitution the DA's office will seek is still being determined, Mr. Wagstaffe said. That's because in addition to allegedly embezzling about $101,000 from the Portola Valley district to help pay for a construction project on his Woodside home, he also allegedly misappropriated funds from the Woodside Elementary School District when he was the business official there. In that case, he secured a loan for nearly $2 million more than what was authorized by the school board for the Woodside School construction project, causing the district's debt to soar.
Investigators believe Mr. Hanretty didn't use the additional money for personal gain — a conclusion they reaffirmed when, after the Portola Valley matter came to light in late April, another close look was taken at the Woodside books, Mr. Wagstaffe said. But that doesn't let Mr. Hanretty off the hook, he said.
"He exposed the Woodside district to (a large) indebtedness, and (the district) has to make good on that," he said, explaining why Mr. Hanretty will be expected to pay restitution to the Woodside district as well as the Portola Valley district.
Mr. Hanretty pleaded not guilty on June 19 to six counts of embezzlement from the Portola Valley district. He had resigned from his post in January, after the DA's office launched the investigation into his alleged misappropriation of funds in the Woodside district.
As a result of that investigation, he was charged in April with three felony counts of misappropriation of public funds. Both cases are being heard together in court.
Mr. Hanretty posted bail, and remains out of custody.
If he rejects the plea deal, he will be in court on Aug. 16 for a preliminary hearing on the charges, Mr. Wagstaffe said.
If the plea deal is accepted, will the details uncovered in the two investigations be made public?
"Legally, because this case fell within the category of ... an investigation, it can be kept confidential forever — but that's not my policy," Mr. Wagstaffe said.
The caveat, he added, is if there is something in the report that would unduly affect someone's privacy or endanger someone's safety, "but I don't know of anything in this case at all to make me think that it would fall into that category."
If the defense asks for the report to be kept confidential as part of the plea deal, "we would never agree to that," he said. "The public pays us. We work for them."