Should the city of Monterey spend $52,000 in public taxpayer money to repair a building it leases to the Boy Scouts of America, a private organization that excludes gays and atheists?

That''s the question being raised by the Monterey chapter of the American Civil Liberties Union (ACLU) and Parents and Friends of Lesbians And Gays (PFLAG), a local gay support and advocacy group.

The target of their complaint is Building S-141, a dilapidated cream-colored building on the lower edge of the Presidio of Monterey, that is part of an area leased by the US Army to the city since August 1996.

When the city signed its lease, the Monterey chapter of the Boy Scouts of America (BSA) was using the building for meetings and other activities. A condition of the lease agreement states that the city "shall allow continuing use" of the building by the Boy Scouts. The city now leases that building to the Boy Scouts for $1 per year, according to city attorney Bill Conners.

According to its lease with the Army, however, the city is also responsible for maintaining the buildings it leases in good condition. Building S-141 needs about $52,000 worth of repair work on its roof and foundation.

On July 7, the Monterey City Council will decide whether to allocate funding for those repairs via a Neighborhood Improvement Program (NIP) grant. It could take staff "up to a year" to work out an action program, Conners says.

In a June 2 letter to councilmembers and Monterey Mayor Dan Albert, local civil and gay rights activist Matt Friday notes that while the local Boy Scouts chapter may be quite liberal, national Boy Scout guidelines prevent atheists and homosexual men and boys from participating in Scout activities.

"As a private organization, the BSA does have the legal right (at this time) to practice those discriminatory policies, but they should not expect to receive public monies, monies that include the contributions of gays and atheists, while doing so," writes Friday, who is also second vice-chair of the Monterey County Chapter of the ACLU.

That''s not the issue, Conners retorts. "The city has the responsibility to maintain this building no matter who is in it, PFLAG or the Boy Scouts," he says. Taxpayer money is already used to fund plenty of exclusionary organizations, he says. "Isn''t the Army exclusionary? They don''t admit gays."

Friday says that the city has a legal out: A clause in the city''s lease with the Army specifically states that the lessee "shall not discriminate against any person or persons or exclude them for participation in the Lessee''s operations, programs or activities conducted on the lease premises."

The point is not, he says, to kick the Boy Scouts out of the building. "They are a wonderful organization," he says. "There are several possible solutions that would allow everyone to benefit. We want to give the Boy Scouts every opportunity to use the building while at the same time provide for the community''s concerns for a non-discriminatory policy on the part of city government."

Rather than leave the Scouts homeless, Friday and Monterey PFLAG Co-Chair Christine Chambers want to encourage the Boy Scouts to rethink their membership policy.

The best solution, they say, would be if the national Boy Scouts retracted its guidelines excluding gays and atheists, the local chapter made a statement disavowing discrimination, and the Monterey City Council added a statement supporting non-discriminatory policies to the city charter. "We''re aiming small and dreaming large," Friday says.

None of these outcomes are likely. City attorney Conners says California''s Unruh Act already prohibits discrimination, so changing the city charter "would be like restating the law." And Steve Royster, executive director of the Monterey Bay area Boy Scouts Council, says local chapters don''t have the right to change national policy.

Royster points out, however, that the local chapter operates on a "don''t ask, don''t tell" basis. National guidelines prohibit avowed gays from joining the Scouts or serving as a leader, but when people fill out membership applications, they are not asked their sexual preference.

"I''m not sure that most 9-year-old boys can tell you what their sexual preference is," Conners notes. "When I was 9, girls still had cooties."

Friday and Chambers insist they want to reach a compromise with the Boy Scouts before July 7. If the Scouts won''t change their policy, perhaps the building could be shared with the Gay Teens'' Alliance, they suggest.

Monterey attorney John Laughton, who heads one of the four Scout units using the building, says he is trying to work out a "convenient time to initiate dialogue" with PFLAG and its Boy Scouts Task Force before the July 7 council meeting.

If the two sides don''t reach a solution before the meeting, Conners says, he doubts whether the $52,000 grant will go through. And then the repairs won''t be done, an outcome no one desires.

"We want to find a solution that will benefit everyone, without polarizing people," Friday says.

"The Boy Scouts want to teach values to young people," Chambers says. "Certainly tolerance of diversity is one of those values."