Tim Hanretty, the former superintendent of the Portola Valley School District now serving a two-year prison term for embezzlement from that district and other financial crimes, must pay the Woodside Elementary School District about $2.67 million in restitution, a judge has ruled.
Judge Mark Forcum issued his ruling on Sept. 10 during a restitution hearing in San Mateo County Superior Court. Mr. Hanretty last year pleaded guilty to filing fraudulent papers to take out a loan of $2.6 million for construction work on the Woodside School campus, although the school board had authorized a loan of only $632,000.
Mr. Hanretty had already been ordered to reimburse the Portola Valley School District for the nearly $101,000 he embezzled from it when he served as superintendent from 2010 to early 2012, plus associated costs of investigating the theft for a total of nearly $182,000. So far, he has repaid almost $121,000, according to Karen Lucian, the district's administrative coordinator.
But Mr. Hanretty's crimes involving the Woodside district weren't so cut and dried.
He had served as financial officer for that district before becoming superintendent in Portola Valley, and oversaw the financing of construction projects. After the district launched an investigation in late 2011 into the unexpectedly high debt it was carrying, Mr. Hanretty was charged with three felony counts that included misappropriation of public funds.
The investigation determined that the additional funds obtained by the unauthorized loan were spent on other school projects.
He was later arrested and charged with additional crimes, including embezzlement related to his work in Portola Valley schools. After fighting the charges, he ultimately pleaded guilty to fraud, embezzlement and related charges.
Although he agreed to pay restitution to the Portola Valley district, he and his attorney, Michael Markowitz, argued that the Woodside district had benefited from all the loan proceeds, and fought the district's attempt for restitution based on an unauthorized debt that it was saddled with. The district sought about $3.63 million in restitution.
According to District Attorney Steve Wagstaffe's report on the ruling, the court calculated the restitution total on the following: $1.968 million, which is the difference in principal on the actual loan amount and the amount that was authorized; $856,553, which accounts for the difference in the interest rate on a loan for the authorized $632,000 and a loan for $2.6 million, after the school district's attorney "renegotiated the interest to reduce it by $700,000"; $76,220 in attorney fees; and $35,788 in forensic audit fees.
That total nearly $2.937 million -- was reduced to reflect the $20,000 Mr. Hanretty has already paid toward restitution and the $250,000 from insurance payments.
Mr. Markowitz, Mr. Hanretty's attorney, could not be reached for this story to comment as to whether he will appeal the ruling.