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Vacaville staff outline CDBG plan and warn Section 108 loan will tie up most yearly grants for decades
Summary
City staff presented a draft Community Development Block Grant (CDBG) 2026–27 annual action plan that allocates roughly $615,000 in federal funds; roughly $431,000 is proposed for public‑facilities improvements and anticipated Section 108 loan repayments tied to the Malakias Montonttoya project, a repayment stream that will draw on future annual CDBG allocations for up to 20 years, prompting council and resident concern.
Housing and Community Services Director Tamara Colden presented Vacaville City’s draft Community Development Block Grant (CDBG) annual action plan for program year 2026–27 on the council dais and described how the city proposes to use an annual entitlement of about $527,000 plus roughly $88,000 in program income, for a total available amount of about $615,000.
Cold en told the council staff’s proposed allocation breaks down into the allowed 20% for planning and administration (about $105,410), up to 15% for public services (roughly $79,000, including $74,500 proposed for the Boys & Girls Club and $5,000 for the program 11 Kids) and roughly $431,130 earmarked for public‑facilities and infrastructure improvements and the anticipated Section 108 loan repayments tied to the Malakias Montonttoya Community Center at Decalores Park. “We received an annual allocation of a little over $527,000,” Colden said. “The remaining allocation totaling $431,130.38 has been allocated towards the improvement of public facilities and infrastructure and the Section 108 anticipated loan repayments.”
Council members pressed staff about how large the repayment obligation will be relative to annual CDBG allocations. One council member noted the repayment amount appears to represent about 57% of the city’s typical yearly CDBG entitlement and asked whether that portion will recur annually “for the next 20 years.” Colden replied that the Section 108 loan principal was advanced up front so the city could fund a larger eligible project now and that the city pledged a portion of future annual CDBG allocations to repay the loan over roughly a 20‑year schedule.
“That strategy was discussed during the consolidated plan and the park planning process,” Colden said, noting that the city submitted the Section 108 application in July 2025, received local HUD field‑office approval in September and is awaiting the commitment letter and final loan documents from HUD headquarters.
Residents who spoke during public comment framed the repayment plan as a potential risk to services in disadvantaged neighborhoods. A frequent speaker urged the council not to abandon promises made through redevelopment and consolidated planning and warned that committing a large share of future CDBG entitlement to loan repayment would reduce funding available for local programs and neighborhood projects.
Staff told the council it will incorporate comments received at the meeting into the draft plan and return with a final plan for approval at the May 26, 2026 council meeting and then submit it to HUD by the required June 3 deadline. Colden said staff would provide a fuller update and any required council actions once HUD issues the loan commitment letter.
What happens next: staff will accept comments, update the draft annual action plan and return the item to council for approval and final submission to HUD; the Section 108 commitment letter remains outstanding.
(Reporting note: allocations and dollar amounts quoted above are those presented by staff.)
