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Tim Hanretty, the former superintendent of the Portola Valley School District, has been arrested and charged with felony embezzlement of public funds from the district, acting superintendent Carol Piraino announced late Friday night.

The charges relate to Mr. Hanretty seeking reimbursement from district funds for $100,926 in work done by a contractor on his personal home remodeling project, Ms. Piraino said in a statement.

District Attorney Steve Wagstaffe said Mr. Hanretty, who was arrested Friday night on a $60,000 arrest warrant, has posted a bail bond and been released. He is due to appear in court at 9 a.m. Tuesday, June 19, in Redwood City.

The new charges — in addition to misappropriation charges he faces in connection with work he did in the Woodside Elementary School District — are six counts of felony embezzlement of public funds and one count of general felony embezzlement, Mr. Wagstaffe said.

Mr. Hanretty’s attorney, Michael Markowitz, said in an email: “We have no comment at this time.”

Only Mr. Hanretty is charged with these offenses, Mr. Wagstaffe said. “We believe that the contractor on defendant Hanretty’s home committed no crime,” he said.

The embezzlement from the Portola Valley district allegedly began in December 2010 just after Mr. Hanretty became superintendent and chief business officer of the district, Ms. Piraino said.

Earlier this year the district hired an outside accounting firm to conduct “an in-depth forensic audit following Mr. Hanretty’s arrest for misappropriation of public funds and other crimes that allegedly occurred during his tenure as the Chief Business Official at the Woodside Elementary School District,” she said in the statement.

The audit revealed that Mr. Hanretty submitted six invoices totaling $100,926 for reimbursement from the district’s solar panel escrow account at Deutsche Bank, she said. The invoices describe work allegedly done at the district, but “the contractor never actually performed any work for the District. Rather, he performed work on Mr. Hanretty’s personal home remodel project. The amounts on the contractor’s invoices to Mr. Hanretty exactly mirror the amounts that Mr. Hanretty submitted to Deutsche Bank for reimbursement out of the District’s funds,” she said in the statement.

“It appears that Mr. Hanretty created the six dummy invoices … to use District funds to pay for work performed on his home remodel project,” she said.

The forensic auditors will make a public presentation of their findings at the June 20 school board meeting.

The forensic audit report (PDF) identifies the contractor as Ron Perez Construction. In an executive summary, the report makes these points about the district’s solar project:

■ “Allegedly, Ron Perez Construction was paid $100,926 from the escrowed funds for work performed on Mr. Hanretty’s personal residence rather than on the District’s Solar Project.”

■ “Although some of the expenses paid from the escrowed funds appear to be for the benefit of Mr. Hanretty, the other expenses appear to be for the benefit of the District.”

■ “Approximately $415,000 of the escrowed funds was used for non-qualified purposes.”

■ “The use of the escrowed funds for non-qualified purposes could jeopardize the $1.509 million federal subsidy amount the district is entitled to receive as part of the Solar Project.”

In April, Woodside school officials said they believed misappropriated funds in that district were spent on district projects, not for Mr. Hanretty’s personal gain. Earlier story: Former superintendent pleads not guilty to felony charges (April 6, 2010).

■ Related story

Portola Valley teachers oppose furlough proposal.

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11 Comments

  1. This is the same guy that was busted for embezzling $4.3 million from Woodside. How much has he stolen at previous jobs? In his mug shot, he looks like a middle aged white guy, so I assume there are plenty of previous jobs.

    I wish that our schools put in more checks and balances for employee spending so that our tax dollars were better protected from fraud like this.

  4. So Mr. Hanretty has been arrested.

    Any chance we might see an en masse resignation by the school board?

    I see that a closed session is scheduled for June 20 … anyone interested in transparency?

    Or let’s go with the status quo?

  5. Tom94301,

    how would the current board stepping down improve the situation? Do you have a slate of candidates to replace them? The current board is a group of people with extensive involvement in the PV schools, and as they all have children attending the PV schools, they’ve got plenty of skin in the game. It’s indeed unfortunate that they didn’t realize that Hanretty apparently couldn’t be trusted, but in fairness, his old boss, Anne Campbell, apparently didn’t realize that either, and she worked with him for years! Hanretty was the business manager for both Woodside and Portola Valley for a decade, so he was already established in the role by the time any of the current board members were elected or appointed. My impression is that prior to the real estate slump, the district was on a comfortable financial footing, and there wasn’t much incentive to go looking for trouble when none was visible.

    If you look at the meeting minutes from past meetings, you’ll see that many of them have sections where the board meets in closed session to discuss disciplinary matters, performance evaluations, other confidential matters, and litigation. The bulk of the agenda for the June 20 meeting is in open session — only 1 hour of the 5 1/2 hours on the agenda is closed, and that is to discuss the performance of the acting superintendent (happens each meeting), some potential litigation, and some inter-district transfer applications. The auditor’s report and the budget discussion are in the open session.

  6. interested onlooker:

    You make many good points and sound very reasonable.

    On the other hand, from my experience with the Portola Valley community, I know that many have a great depth of intelligence and energy and concern for the excellence of their children’s educational experience. Additionally, they do not have a credibility burden from possibly having showered a generous salary, loans, and bonuses upon an employee who may have taken advantage of their trust.

    I cannot speak to Anne Campbell’s experience, but it took me much less than a year to have serious concerns.

    I’m not convinced that the agenda items that you indicate are closed (i.e., the performance of the acting superintendent) should not be held in the open.

    I sense that the times are changing and that we are moving towards transparency in many new areas.

  7. The bank was happy to lend the money – and probably did not check with the financial office to confirm the amount of the loan. Those banks make it easy.

    On the other hand, school administrators ought not to be accessing the school district’s funds. The only money they should see should be their paychecks. Everything else should be handled by the School Board and the financial officers in front of the public.

    Don’t tell me, the schools probably don’t carry errors and omissions insurance policies.
    those with an oversight responsibility failed big time here and should be terminated as incompetent. The problem most likely starts with the school board. …

  8. 1. To bad the loans to the teachers were not handled properly. It is a good program that some people took advantage of by not paying their share of the loans

    2. The district is in a crisis. The fix is going to come from the district, parents and teachers. All of us need to share in the pain of getting this fixed, equally. Let’s not expect one group to carry the responsibility by themselves, and not do our own part in fixing this problem.

  9. The books were a mess. Money wasn’t well managed. Accountability was lacking at many levels. Many want to help, but only a few have the ability to actually do anything other than talk. As of now, most communication is still less than ideal.

  10. Tom94301,

    § 54957(b)(1) — “[N]othing contained in this chapter shall be construed to prevent the legislative body of a local agency from holding closed sessions during a regular or special meeting to consider the appointment, employment, evaluation of performance, discipline, or dismissal of a public employee or to hear complaints or charges brought against the employee by another person or employee unless the employee requests a public session.”

    I believe I saw similar language regarding litigation.

    The board members are chosen to be our representatives. It’s clearly not practical to directly involve everyone in everything.

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