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The 49-year-old, who manages the £7,000-a-month centre, has been handed a three-month jail sentence - suspended for two years - and had his suitability to work with vulnerable people called into question.
In a four-day trial at Canterbury Crown Court, the mechanic went on the attack, labelling his neighbours – most of whom are in their 70s and 80s – "terrorists".
He claimed one grandmother was a "nasty, twisted evil woman" and described a man as "impotent".
Another time, a neighbour spotted him outside her window with his flies undone, making an obscene gesture.
Milne denied three charges of committing acts outraging public decency, but a jury convicted him of two.
Judge James O'Mahony told him: "You are a recovering alcoholic and you opened this place, which has done excellent work – although you quoted Martin Luther King when you said you had a dream. That sounded rather grand.
"But there is another side to you, someone who is abrasive and aggressive and unpleasant when things don't go your way."
Milne was caught on CCTV making an obscene gesture at a neighbour who confronted him.
The judge said this had called "into question his suitability to be a mentor to vulnerable people".
Judge O'Mahony said his reaction to one victim was "insulting and nasty" and that when a police officer arrived to carry out an investigation, Milne "lectured him and threatened to report him".
"There is another side to you, someone who is abrasive and aggressive and unpleasant when things don't go your way..." - Judge James O'Mahony
The judge added: "You even lectured the court on the law. Well, the law is that you are going to get a suspended prison sentence."
The court heard how Maureen Ellison, 82, was in the kitchen with her daughter–in-law and grandson when she saw Milne with his flies undone.
Her son-in-law Kerry Percell said: "Maureen was washing up. All of a sudden she shouted: 'He's doing it again'.
"We moved forward to the window and that's when I saw Mr Milne looking down, his hands near his flies, and making gestures.
"As he was doing that he had a grin on his face. He then looked up and saw my wife and I standing there and his face changed to shock and he was gone."
Mr Percell said: "I could see his genitals before he looked up and his smirky grin turned to horror when he saw me looking at him."
He said his mother-in-law was "petrified of Mr Milne" and has been left nervous and shaking.
Paul Jackson, for Milne, said there had been a "sense of disquiet" among residents when Pathways House was opened.
The barrister alleged Mrs Ellison was upset that the centre was just 25 ft from her home.
Mr Percell replied: "My mother-in-law was concerned but not upset. As it has turned out the centre caused no problems. It is just Mr Milne who won't let it go that people have complained about him."
Mr Jackson said there had been three separate investigations into the running of the centre after complaints from the Rochester Avenue Residents Association.
He said the residents asked the council to shut the centre, but had been unsuccessful – and claimed Mr Percell was concerned.
"I have no concerns whatsoever about the centre, but I do have about the way Mr Milne has behaved and treated not only my mum-in-law but also my daughter," Mr Percell said. "He did exactly what I saw. I have told the truth."
His wife Susan told the jury she had also seen Milne expose himself.
Daughter Emma Chown told the jury how earlier she had been confronted by Milne who had often pulled faces and laughed at her and her 12- year-old son.
Ms Chown said she was shocked and called the police. Later she was also present when Milne exposed himself.
The judge said that residents and Milne fell out over the opening of this business.
Milne claimed the residents had invented the claims in an attempt to close the centre.
He told the jury he was only interested in the welfare of "my patients".
But the judge told him the residents "had every right to be concerned because this was a business. The residents understood that they had covenants prohibiting businesses being set up in a residential area".
Milne was ordered to pay £3,500 in costs within a year and ordered him to stay away from seven residents.
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