The Los Gatos Town Council voted this week to split $20,000 in supplemental grant money among three organizations providing rental assistance and homeless services, but rejected a $3,000 request from the Los Gatos Anti-Racism Coalition after a town Finance Commissioner raised pointed questions about the nonprofit's accounting practices and program overlap.
The council approved the $20,000 increase to its sustaining grant program during last Tuesday's meeting, according to The Mercury News. Lawmakers ultimately approved $10,000 for Live Oak Nutrition Center's senior programming and $6,200 for St. Vincent de Paul Society to cover towel and laundering vouchers plus emergency rental assistance for unhoused residents, but rejected $3,000 earmarked for the Anti-Racism Coalition to help cover storage unit rentals and security deposits for people facing homelessness.
The rejection followed a letter filed by Phil Koen, who serves on the Town of Los Gatos Finance Commission, an advisory body that reviews municipal budgets, financial policies and grant allocations. Koen argued that the coalition's arrangement to split rental assistance funds with St. Vincent de Paul Society violated town rules, writing that splitting rent relief by arithmetic spreads the money thin and spreads accountability thinner. He also contended the coalition's program duplicated services already offered by West Valley Community Services and criticized the nonprofit's financial record-keeping.
Council Members Split On How To Respond
Council Member Mary Badame voted against the grants for St. Vincent de Paul Society and Live Oak Nutrition Center, saying town officials are stewards of town and residents' money and noting the town's budget issues. Council Member Matthew Hudes also voted against those grants and proposed allowing the Finance Commission to review community grant program rules before future funding decisions, a motion the council rejected on a 3-2 vote. Hudes raised concerns about ensuring cash assistance reached intended recipients fairly.
Council Member Rob Moore did not share Koen's concerns about the coalition's accountability. Moore said standard receipts and accounting are reasonable practice but he opposed subjecting small nonprofits to formal audits. According to town attorney Gabrielle Whelan, the coalition's arrangement to split funds with St. Vincent de Paul Society was included in the nonprofit's original proposal and aligned with the terms of its grant agreement.
Council Member Ryan Baker, who allowed the coalition and St. Vincent de Paul Society to split the grant money in the first place, said he did so to avoid requiring the two organizations to file duplicate paperwork. Baker reported that the coalition's financial reporting was pretty good and said it could serve as a template for other organizations. He added that the three rental assistance groups meet different community needs, while Council Member Jeff Suzuki said the coalition's program is the most adaptable among them.
What The Coalition's Program Actually Covers
The Los Gatos Anti-Racism Coalition works with St. Vincent de Paul Society to administer a rental assistance program that offers a maximum payment of $500 to qualifying applicants. The coalition may assist households whose income-earner is lost, unemployed, or has reduced hours or pay, as well as people facing extraordinary expenses such as car accidents or acute medical conditions, an eviction notice, or a rent increase. As part of the grant dispute, the coalition provided line-by-line expenditures, disclosures and copies of canceled checks documenting how it used the funds.
West Valley Community Services, by contrast, provides a more expansive rental assistance program that includes eviction mediation and emergency financial assistance for utility costs and rent. The organization works with the Santa Clara County Homelessness Prevention System, which provides temporary financial assistance, legal support and case management, and receives $15,000 annually from the town outside the community grant program. The Town of Los Gatos separately secured $200,000 in federal funding with West Valley Community Services in February to operate a mobile navigation van offering homeless support services across Los Gatos and nearby communities.
A Nonprofit Built On Rapid Response
Since launching its emergency rental assistance program in June 2023, the coalition had raised over $25,000 to assist more than 50 families and individuals facing potential eviction across Santa Clara County, according to San José Spotlight. The nonprofit's model relies on quick payments to help low-income households avoid losing housing during temporary financial crises, and it has used its grant money specifically to aid Los Gatos town residents. The coalition has pointed to 2023 Santa Clara County homeless census data showing Hispanic or Latino residents made up 25% of the county population but 41% of unhoused residents, while Black residents comprised 2.9% of the population but over 15% of those experiencing homelessness, as evidence that low-barrier rent relief addresses systemic inequities.
The council previously allocated $60,000 in March 2024 to maintain emergency homeless programs, including hotel vouchers to temporarily shelter unhoused residents during severe winter weather, since Los Gatos lacks a permanent homeless shelter and relies on targeted grants and regional programs. The dispute also arrives as a January regional feasibility study covering Los Gatos, Campbell, Cupertino, Monte Sereno and Saratoga recommended prioritizing direct subsidies for permanent housing and expanding local participation in the countywide prevention system, encouraging alignment with centralized intake and financial tracking.
Budget Pressures Loom Over Every Grant Decision
The council's scrutiny of nonprofit spending comes as Los Gatos navigates persistent fiscal strain. The council adopted an $85.3 million municipal budget for fiscal year 2026-27 that required drawing $1.3 million from town reserves to cover expenditures exceeding revenues, according to the Los Gatan. That budget included $3.2 million in council-added operating spending beyond initial staff recommendations. A year earlier, the town's Finance Commission had unanimously recommended cutting costs and freezing hiring to resolve a projected $2 million operating deficit, with multi-year shortfalls projected between $5 million and $6.5 million.
Rental assistance broadly is meant to help low-income or struggling households pay housing costs, back rent, security deposits and utilities to prevent eviction and homelessness. Whether that mission is best served by a patchwork of small, grassroots nonprofits or by consolidating funds into larger, countywide systems like the one West Valley Community Services taps into remains an open question for Los Gatos officials as they weigh future rounds of grant funding. The town allowed applicants to amend their proposals for the increased grant funds this cycle, leaving room for the debate over accountability and overlap to resurface in future allocations.
