Milpitas council reallocates $368,359 in CDBG program income to senior safety, microenterprises and services

The Milpitas City Council unanimously approved a staff proposal to reallocate $368,359.55 in program‑income repayments from a retired home rehabilitation loan program to public services, program administration, capital projects and economic development.

Michelle Silva, an administrative analyst with the Office of Housing, told the council that the repayments — not entitlement funds — were held in a revolving loan account and that staff recommend applying the full balance to eligible CDBG activities. "Tonight, we are asking the council to consider our recommendation for reallocating these funds," Silva said during her presentation.

Under the staff recommendation adopted by the council, the money will be split as follows: $73,671.91 toward program administration to cover HUD‑required notices, translations and a greater share of personnel/technical assistance costs; $55,253.93 toward public services (to be allocated with the next entitlement cycle); $143,660.23 to Terrace Gardens Senior Housing for an urgent fire‑panel and smoke‑detector replacement; and $95,773.48 to the city's microenterprise assistance program (MEEP) to support small local businesses and technical assistance.

Clarissa Diaz, representing Terrace Gardens, described the proposed capital work as "life‑safety systems" for 184 low‑income senior residents and told the council that replacement parts for the aging systems are no longer manufactured. "These are not cosmetic upgrades. These are essential systems that directly protect the health and safety of our Milpitas senior residents," Diaz said.

Michael Thomas, the city's economic development coordinator, summarized the MEEP request and the proposed technical assistance partner work with the Silicon Valley Small Business Development Center. Melanie For of Upwords (Boost program) urged funding for a childcare provider mentorship pilot to expand child‑care capacity and support family providers.

Council members asked staff to clarify HUD and CDBG restrictions, how applicant budgets were evaluated, and whether the recommended split reflected council direction from May 6. Staff said the recommended allocations follow statutory CDBG caps and earlier council direction to split remainder funds roughly 60/40 between capital and economic development. The city manager and city attorney also confirmed that staff negotiated standard HUD agreement language for the current entitlement year.

Vice Mayor Barbado moved the ordinance, and the council voted unanimously to approve the amendment and authorize the city manager to make necessary plan changes. The council also noted that about $2.4 million remains outstanding in prior loans and that future repayments will be brought forward for reallocation as program income becomes available.

The council's action authorizes staff to finalize grant agreements with Terrace Gardens and MEEP and to return next month with entitlement allocations for the coming program year.