Casilda Luna, affectionately known as the grandmother of the annual Hispanic Festival, recalled how she and several community leaders had to stage a dance and charge $1 to raise money for the first festival 17 years ago.

With the help of the biggest moneymaker -- 50-cent sangrias -- the dance raised $2,000, she said.

Three months later on a hot July day, 21 makeshift booths were set up at Kalorama Park in Adams-Morgan and 15 floats representing various Latin countries made their way down Columbia Road NW for the first time.

The auspicious beginning drew 10,000 people.

"We felt we needed a festival to demonstrate to the city that we were here and alive," said Luna, a 61-year-old grandmother of three. "We were growing in number, but the city seemed unaware of our existence."

The festival has become the oldest and largest community block party in the Washington area. It now extends several blocks along Columbia Road and 18th Street NW where an estimated 150,000 people are expected to gather today and tomorrow to celebrate Hispanic culture. Organizers fear about 50,000 others who would have attended will stay away because of the sweltering heat.

More than 40 bands will play salsa, reggae and cumbia music during the last two days of the celebration, which began last Sunday, while 250 kiosks representing 25 countries will provide food and crafts.

And from 1 to 3 p.m. tomorrow, 20 floats representing the color and tradition of almost every Latin American country will parade along Columbia Road from 16th Street to Kalorama Park.

"We expected to have the festival get this big," said Luna, who now serves as an adviser to the festival's committee. "The festival is a reflection of the Hispanic community. It grows as the community grows."

According to the Mayor's Office on Latino Affairs, the Hispanic population in the city has grown from 16,000, when the first festival was held, to the conservative figure of 85,000 today. There are about 250,000 Hispanics in the Washington area.

But 1970 could have been the first and last year for the festival, Luna said, had it not been for a suggestion that the committee seek funds from the National Endowment for the Arts.

"We didn't have any money, although everybody was looking forward to it, said Luna, a native of the Dominican Republic who came to the United States in 1962. "We got really frustrated {the next} year until a woman came to us and told us to seek the endowment."

The festival has grown so large that five major companies including Coors and AT&T are sponsoring the event and a private Hispanic-owned management firm has been hired to coordinate it.

For the first time, Creative Associates Inc, a Washington-based management firm, has handled public relations, logistics of the street festival and the scheduling of various workshops and seminars.

The festival committee, however, continues to enjoy the decision-making role that it has in the past.

The responsibility of putting on the festival has been so great that the committee has resembled an unofficial civic group.

Eduardo Perdomo won a hotly contested election in 1985 to serve a two-year term as president of the committee, one of the most influential positions in the city's Latino community.

Candidates for president campaigned and wooed more than 1,000 voters to the polls that year.

On the night he won, Perdomo, who was able to get busloads of his supporters to the polls that day, promised a bigger festival than the previous year, more cultural exhibits and an amateur soccer tournament.

"The festival is a way for us to communicate our frustrations, richness of culture and our determination to stay," Perdomo said.

For that reason, he said, a 25-year-old undocumented worker from El Salvador will serve as the grand marshal of Sunday's parade. He is not being identified in fear of a possible arrest before the parade.

"He is what our community is all about," said Perdomo, a native of Colombia who came to the United States in 1967. "About 80 percent of the Hispanics here are or were immigrant laborers."

Referring to a second generation of Hispanic children, Perdomo said, "We don't want them to forget where we came from. He {the grand marshal} is a symbol of all of us."

Perdomo said selecting the Salvadoran worker as grand marshal was not a political gesture attacking the new immigration law. "We don't see any need for that," he said.

Although the festival is a celebration of the Hispanic culture, theevent is also geared toward non-Latinos, said Elena Rocha, second vice president of the committee.

"It's time for non-Hispanics to share food, music and a few laughs with us," Rocha said. "And maybe go home knowing a new word or two."