Pride Toronto says it will launch a dispute-resolution process to address demands that it ban police floats and booths as the group looks to move past a tumultuous summer marked by a politically divisive parade and the sudden exit of its top executive.

The organization held the first of two town hall meetings on Tuesday evening, its first large-scale public response since the parade in early July.

On the surface, the meeting was staged to solicit membership feedback on the organization's first Pride Month and to make future festivals "more safe and inclusive." But Tuesday's packed forum, which drew more than 400 people, shed light on a fractured organization and rifts in Toronto's LGBTQ community.

Story continues below advertisement

At the centre of this year's maelstrom is Black Lives Matter Toronto, a movement fighting anti-black racism that Pride chose as its honoured group for 2016, and BLM Toronto's demand to ban police floats and booths at future parades.

"As a board, we have struggled with this issue," Pride board co-chair Alica Hall told the audience.

"On the one hand, the work that Toronto Police Service has done to improve relations with some members of the LGBTQ community should be acknowledged. … But problems still remain. As an organization, we must listen when members of our community bring their concerns forward to us."

The dispute-resolution process announced by the board of directors on Tuesday is a complex procedure that involves mediation and third-party arbitration.

BLM Toronto staged a half-hour sit-in at the parade and issued nine demands to Pride organizers, including a funding boost to black and queer youth spaces.

Mathieu Chantelois, then the executive director of Pride Toronto, quickly signed the demands and BLM Toronto resumed the parade. But the move ignited backlash from the police union, and prompted Mr. Chantelois to recant on the agreement. BLM Toronto, in response, vowed to hold Mr. Chantelois accountable.

At the town hall, members voiced their concerns about Pride Toronto's increasing corporatization, the erosion of its political mandate and its failure to support trans, black and hearing-impaired communities.

Story continues below advertisement

At one point, a man walking away from the microphone made a racist comment to BLM Toronto, sparking demands to expel the audience member. Pride organizers sat quietly on the stage.

"You're useless," a woman told organizers. "Pride was a success despite you."

BLM Toronto's demands are "the minimum you should be doing," another member said to loud applause.

Pride Toronto is also grappling with Mr. Chantelois's unforeseen resignation this month.

Mr. Chantelois said he left the job to pursue a new role with Cineplex Media. But later that day, Pride Toronto revealed that its board of directors had received a letter from its staff on July 7 detailing "serious allegations" against Mr. Chantelois, including claims of racism and sexual harassment.

The board showed the letter to Mr. Chantelois and retained a law firm specializing in workplace investigations, Pride Toronto said in a statement. Mr. Chantelois opted to resign rather than complete the investigation, Pride Toronto said.

Story continues below advertisement

After his exit, Mr. Chantelois retained Soma Ray-Ellis, a high-profile employment and labour lawyer. Mr. Chantelois is "reviewing all of his legal options," Ms. Ray-Ellis told The Globe and Mail in a statement.

"Mr. Chantelois resigned as a result of realizing he could not satisfy all of the stakeholders and in doing so he hoped that Pride Toronto could press the reset button and move forward with their good work," she wrote.

This year's backlash echoes the turmoil that ensnared Pride Toronto in 2011. City councillors threatened to cut the non-profit group's funding after it included Queers Against Israeli Apartheid, which critics denounced as a hate group.

After the upheaval, the organization was careful in recruiting a new executive director, said Francisco Alvarez, a board co-chair from 2010 to 2013.

"People tend to ascribe everything that the organization does to the person at the top," Mr. Alvarez said.