The Castro LGBTQ Cultural District has largely recovered from a $108,000 accounting error made by its fiscal sponsor, the San Francisco LGBT Community Center. District officials said that the snafu, apparently the result of human error, did make life challenging over the summer.
Cultural district manager Tina Aguirre, a genderqueer Latinx person, said they had been notified of the mistake in early July. That error was "a manual miscalculation of unspent grant funds," according to the community center, which handles the cultural district's accounting.
The LGBT community center has acknowledged and apologized for the mistake.
"The center has served as the fiscal sponsor of the Castro cultural district for two years, and we've worked tirelessly to support the growth of such an important cultural institution," wrote Miguel Raphael Bagsit, the center's communications manager, in an email to the B.A.R. "The financial error occurred due to a manual miscalculation of unspent grant funds. We've expressed our deepest apologies to the Castro cultural district's leadership team and have continued to move forward with our partnership."
The error led cultural district staff to believe they had more funds than they actually did. Coupled with a directive by the cultural district's funder — the Mayor's Office of Housing and Community Development — to spend down funds before the end of the fiscal year, what was thought to be a $108,000 windfall turned out to be a major headache.
That spend-down included distributing $90,500 on LGBTQ Pride-related events, stated Aguirre in an email to the Bay Area Reporter, as well as distributing $30,000 in a second round of small business grants. The problem, of course, was that the district didn't actually have that money.
"Because we believed that we had a large surplus, we created a spend down plan for FY 2021-2022 and a draft organizational budget for FY 2022-2023 that was in excess of what we actually have available," Aguirre wrote in a July 10 email to Julia Sabory, community planning and cultural districts manager with the MOHCD, as well as Brian Cheu, director of community development at MOHCD, and Imani Pardue-Bishop, a community development specialist with the office.
Sabory did not immediately respond to a request for comment.
The error, Aguirre wrote, would force the district to make serious cuts to its budget. Among the items Aguirre proposed: a $20,000 reduction to their own salary; forgoing a $10,000 salary increase for an assistant; cutting the district's program coordinator from 30 hours per week to 20 hours; and not being able to pay for security or an assistant for the district's COVID hub activities. Finally, Aguirre added, "We will have no funds for events, [diversity, equity, inclusion, and accessibility] work, or any contingencies that occur within our community."
Ultimately, Aguirre did not have to take the salary cut, nor were the other potential reductions necessary either. A staff member left and the district did not fill the position.
Word of the accounting error was included in documents that Aguirre sent to MOHCD and were obtained through a records request by gay activist Michael Petrelis, a critic of the cultural district, who forwarded them on to the B.A.R.
"Poor management all around and no transparency to the community," Petrelis wrote in an email to the B.A.R. last month.
The Mayor's Office of Housing and Community Development, however, was satisfied with the results of an inquiry into the matter.
"As far as actions taken by MOHCD, we met with the Cultural District and their fiscal sponsor to better understand the nature of the error and once it was established that the money was indeed spent appropriately, even if it wasn't in the established timeframe, the matter was considered resolved," said Anne Stanley, communications manager for MOHCD. "We did advise on improved communication and budget management with both the District and fiscal sponsor to prevent this kind of issue from happening again, but ultimately our office was satisfied with the resolution."
The cultural district's COVID hub was a program that arose with the city's need to do outreach to San Francisco's numerous communities. COVID hubs, where folks could be tested and vaccinated for the virus, particularly in the early days of the pandemic, provided a means to provide particular communities — such as the LGBTQ community — with services and information in a culturally familiar milieu.
But COVID also required a rapid shift away from other activities at the time, Aguirre told the B.A.R. A planned celebration honoring Stonewall Rebellion trans pioneer Marsha P. Johnson was canceled, and money and resources slated for that event were diverted to COVID services, Aguirre said. As health outreach wasn't part of the cultural district's original mission, money for those services had to come from the district's existing budget.
Fortunately, the district received two significant financial lifelines, Aguirre said. The first came in the form of funding for the costs the district had covered at the COVID hubs. As the hubs were typically set up in metered parking areas, such as the parking lot on 18th Street behind Walgreens, the district had to cover the costs of those spaces. They were also paying for security at the sites, as well as cleanup, done by the San Francisco Department of Public Works. The San Francisco Department of Public Health agreed to begin covering those costs, instead. Since the rest of the expense behind running the hubs was covered by Virus Geeks, a South San Francisco-based medical lab, the district was now out of any financial responsibility for the sites. The agreement with DPH will last through December.
"That was a savings of more than $50,000," said Aguirre.
The second savings arose with the unexpected departure of one of the district's employees. Aguirre decided not to fill the vacancy; another significant savings. With both of those actions, the district was no longer in the hole.
"The decision not to fill the staffing vacancy and our decision to not participate directly in the hub are direct results of this," agreed Stephen Torres, a gay man and the district's advisory board executive co-chair.
For now, the district is back in the black, said Aguirre. They explained that the district receives $230,000 each year from the city. Including rolled over funds and a $50,000 grant that the district just received from the city's Office of Economic and Workforce Development for small business activations for this fiscal year, which began July 1, the cultural district's total budget for FY 2022-2023 is $478,914, Aguirre wrote in a text message.
"It's really the last month that I was able to share with the advisory board and the sponsor that we would be in the black. It really has been in the last month," they said.
Updated, 10/14/22: This article has been updated with comments from the Mayor's Office of Housing and Community Development.
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