The white face-paint did not conceal the anguish in Chris DeMonterey's face, as he stood somberly next to an altar that he built in honor of his dead friend.

"Tom's death is such a tragic loss for us, especially for his wife," said DeMonterey, remembering his good friend and roommate Tom Kennedy. The 48-year-old artist drowned at Ocean Beach while surfing in April. "They were really happy together, and I have never seen a love like theirs."

Decorated with pictures and remembrances from his adventurous life, the altar reflected Kennedy's artistic endeavors, sharing his legacy with the community in which he lived.

Every year on Nov. 2, families, neighbors, artists and activists gather by the thousands on the corner of 24th and Bryant Streets to celebrate death and honor loved ones with a procession and memorial ceremony known as "Dia de los Muertos."

Elaborately embellished sugar skulls and painted faces, illuminated by a sea of candles, swept the streets of the Mission District on Monday night. For residents and those in mourning, it was hard to imagine that the annual ritual almost didn't happen this year.

With the city's budget woes felt all across the spectrum, organizers for the celebration's Festival of Altars in Garfield Park were forced to spread their resources gravely thin.

Increased permit fees and dwindling services associated with permits were, for the first time in its 31-year history in San Francisco, putting this crucial portion of the festival in jeopardy. Organizers faced a bill that included extra toilets, hiring licensed security guards and paying for services normally provided by the city.

"Our personal budget hasn't grown, but the city's requirements have," said Siouxsie Oki, a volunteer for the Marigold Project. Marigold, run by Oki and five other volunteers, is a nonprofit that organized the Festival of Altars on 26th and Harrison Streets for the past 11 years. "San Francisco is providing fewer services for festivals because of the budget constraints."

With an annual budget of approximately $4,000, Marigold covers the costs of hiring artists to create the altars, the decorations, and permit fees.

This year, however, nearly $2,000 have gone toward meeting the new permit requirements--adding up to almost half of Marigold's budget. Services and the use of public facilities provided by the Recreation and Parks Department, on the other hand, have been slashed.

Even though Garfield Park has a public bathroom facility, the new park permit issued by the San Francisco Recreation and Parks Department requires Marigold to provide 10 portable toilets, as well as one dumpster.

"We have to pay to have a trash person there and we have to pay for bathrooms," Oki said. "The city is providing fewer services for festivals because of the budget constraints."

The portable toilets added another $500 to the bill, and the cost for trash removal is estimated at $500 to $600, plus another $250 salary for the staff hired to monitor the restrooms from 6 to 10 p.m.

Previously, the Recreation and Parks Department provided one staff member to oversee the bathroom facilities. With cutbacks, however, Marigold was responsible for hiring a monitor.

In addition to extra costs, the permit required Marigold to hire six state-licensed security guards to patrol the park. Hiring the guards from a private company was an estimated $1,100 addition at the organization's expense.

Some police officers who were on duty at the celebration in previous years felt the additional security measures were well within reason.

"Last year, we arrested people for urinating on people's private property," said Sgt. Marta McDowell, SFPD events manager. "If you want to have a public event, you have to pay up."

According to Oki, the "Altars in the Park" portion of the festival relies heavily on in-kind donations, which offer a service, such as publicity, rather than money -- and organizers fought hard to keep it that way.

"We don't have an interest in having a relationship to corporations," Oki said. "In-kind donations are partnerships that we are committed to, not capitalistic endeavors."

For the first time in it's history, the people behind "Dia de los Muertos" reached out to the community for help, in an effort to keep the Day of the Dead festivities one of the few completely non-commercialized public festivals in the Bay Area.

One way the organization hoped for some much-needed funding was by creating a "chip-in" donation button on their Web site, http://dayofthedeadsf.org. Visitors to the Web site are able to click on the button and donate a desired amount for next year's celebration. So far, this online initiative, which ends on Nov. 30, has raised almost $2,000.

"It's a fantastic tool. We've been getting a bunch of donations ranging from $10 to $60," Oki said. "A lot of people are surprised because we've never asked for money before."

The Marigold Project also had a table set up in Garfield Park on Monday, where donations were accepted.

"We are looking to raise $4,000 to cover all fees for next year, not knowing what the additional fees will be then," Oki said.

The new regulations and fundraising took up precious time that could have gone into planning details of the event, but according to Oki, creating a space for the community to come together was far more important.

"It's all about the human connection. We are all going to die someday and most of us know somebody who has died," said Oki. "Day of the Dead is a time to honor those who have passed away, and it's an opportunity for people to engage with their community members."

Although Marigold faced several obstacles while putting on the Festival of Altars, organizers and festival-goers agree that it was well worth the effort.

"Dia de los Muertos is beautiful. San Francisco is a multicultural wonderland," said Kelly Donohue, 20, a UC Berkeley student. "The recession is not going to stop the cultural awareness of this city."

The organization caught the attention of the Recreation and Parks Department, which waived the $500 permit fee for renting Garfield Park on Oct. 27.

Along with Marigold's efforts, the people of the Bay Area continue to keep the tradition of Dia de los Muertos alive.

"This is our culture, this is us," said Marlene Manzanares, 37. Manzanares was born and raised in the Mission District, and lit a candle for her brother, who died two months ago. "The candles are the light for their souls. It's so they know where to find us."