THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, August 14, 1996 TAG: 9608140319
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY TOM HOLDEN, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: 106 lines
The two loose-leaf binders were thick, about four inches each, and they held important facts for attorneys in Tuesday's malfeasance-in-office trial of School Board member Tim Jackson and former member Ferdinand Tolentino.
The binders contained the minutes of board meetings during the 1994-95 fiscal year, when the district's finances spun out of control and left the public with a $12.1 million deficit.
Under questioning by Assistant Commonwealth's Attorney Cynthia Shepherd, the clerk of the Virginia Beach School Board, Dianne Page, told the court she had reviewed the voting records of Jackson and Tolentino.
At no time, she testified, did either defendant vote ``no'' when it came to spending money. But no sooner had her testimony ended than defense attorney James O. Broccoletti stepped forward and used the same documents to his advantage.
In a methodical and deliberate manner, Broccoletti showed how the minutes also contained the interim financial reports and comments of former chief financial officer Mordecai Smith, who assured the board the budget was in good shape, even as its condition worsened by the month.
Broccoletti had Page read some entries aloud. The words ``. . . revenue estimates were accurate . . .'' and ``. . . expenses in line with budget authority . . .'' filled the courtroom.
In the May interim report, one of several read to the nine-member jury, Smith reportedly told the School Board that it would end the fiscal year with a $1 million surplus.
What had actually been taking place was a furious money shuffle, with more than $43 million in interdepartment transfers that were authorized to cover various deficiencies in the $344 million budget.
The reason the school district ran a deficit in the 1994-95 fiscal year - a violation of state law and school district bylaws - was that it spent $6.4 million more than it should have and took in $5.7 million less than anticipated.
To drive home a point about the nature of board work, Broccoletti had Page point out that board members are paid $300 a month to attend two meetings a month, often lasting eight hours or more, with hours more of outside work.
The attorneys' questioning laid the central themes of both the commonwealth's case against Jackson and Tolentino and the defense strategy.
Commonwealth's Attorney Robert J. Humphreys wants to show the jury that Jackson and Tolentino were not careful stewards of the public's money and voted every time to spend it, even when there was growing concern within the city's financial community that the budget would not balance.
At the same time, defense attorneys Broccoletti and Moody E. ``Sonny'' Stallings Jr. argued that their clients were misled by a school administration that consistently provided false information to a board that nobly but in vain sought the truth about the budget.
Before Page took the stand, the court heard from Patricia Phillips, the city's director of finance for the last four years. She went through a laborious explanation of how the city funds its school district, how funds are managed, kept apart and accounted for.
Phillips was among the first city officials to sound an alarm about the district's finances.
Her concern about school money helped advance the prosecution's case that Jackson and Tolentino failed to act when they had warning of problems.
She also testified that for accounting purposes the city keeps its money in a ``pool'' that it uses for investments and, among other things, to underwrite its AA bond rating.
Stallings tried to elicit testimony that if the money was in a pool, it should be available for use by the schools when they fall short. But Phillips would not relent, saying that once an agreed-upon budget is exceeded, a deficit is created, regardless of how it is retired.
Defense attorneys wanted to show that the city keeps this money in reserve for just such emergencies.
They produced a letter from City Manager James K. Spore that said Virginia Beach was ready to help the board this year with an additional $2 million if it was needed.
Phillips testified that she conferred with Smith, the former chief financial officer, about the budget problems she saw coming.
She said she then told Spore about them, who, in turn, informed the City Council - which ultimately approached the School Board.
Jackson joined the School Board on July 1, 1994. By then, Phillips testified, the budget was already in trouble.
Tolentino was appointed in January 1994. ILLUSTRATION: [Color Photo]
CHARLIE MEADS
The Virginian-Pilot
Ferdinand Tolentino, left, and his attorney, James O. Broccoletti,
center, listen to testimony Tuesday along with Tim Jackson.
SCHOOL DEFICIT TRIAL
DEFENDANTS: Tim Jackson, Ferdinand V. Tolentino
CHARGE
Jackson, a member of the Virginia Beach School Board, and
Tolentino, a former board member whose term expired June 30, are
charged with malfeasance of office. The misdemeanor charge stems
from the school district incurring a $12.1 million deficit for the
1994-1995 fiscal year. It is against state law for any governing
body to end a budget year with a deficit. Virginia Beach
Commonwealth's Attorney Robert J. Humphreys asked seven of 11 School
Board members to resign or face prosecution. Jackson and Tolentino
were the only members who refused.
PENALTY: $250 fine, removal from office.
WHAT HAPPENED TUESDAY
City Finance Director Patricia A. Phillips, School Board Clerk
Dianne Page and Internal Auditor Victoria L. Lewis were called to
testify.\
KEYWORDS: MALFEASANCE TRIAL VIRGINIA BEACH SCHOOL BOARD by CNB