Manteca’s Community Development Department for all practical purposes will cease to exist unless a municipal budget is adopted prior to Aug. 1.

The reason is all eight department positions are being covered by special funds and not general funds for the final 11 months of the fiscal year that started July 1.

Failure to adopt the budget also means the city won’t be able to start the recruiting process for a traffic engineer that the council several months ago identified as being crucial. That in turn will set back projects that the council had deemed high priorities including sidewalks and road improvements on Louise Avenue in East Manteca, sidewalk to the Social Security office on Commerce Drive, Woodward Avenue speeding and safety issues, and addressing safety concerns on Cottage Avenue between the freeway overcrossing and Louise Avenue.

Should the Community Development Department be defunded due to a new budget not being in place it would stop the processing of all projects ranging from subdivision work to employment centers.

By not adopting the proposed overall municipal spending plan of $95.7 million including $13.6 million in capital improvement projects it means Manteca is still operating under a continuing budget resolution they passed in June. That resolution legally allows the city to continue under the framework of last fiscal year’s spending plan until a new budget is put in place.

And since that budget called for the development service positions to be taken from the general fund, the city will be forced to lay off the eight staff members as funding will run out.

City Manager Karen McLaughlin Wednesday confirmed the eight layoffs will have to take place unless the proposed budget is adopted before July ends.

After Manteca resident Bruce Lownsbery requested more time to look at the budget before the council took action, elected leaders on Councilman Steve DeBrum’s request unanimously postponed adoption until the Aug. 7 meeting.

The proposed 2012-13 fiscal year budget takes pressure off the stressed general fund by using $440,685 in development agreement fees to keep all Development Services positions in place for one year. Those positions include Community Development Director Fredric Clark, a deputy Community Development Director, a planning manager, two senior planners, two assistant planners, and an administrative assistant. That reflects two less positions than last year and eight less than four years ago.

City staff did not think it would be wise to cut development staff just as CenterPoint and Austin Road Business Park - two major private sector job generating proposals - are preparing to move forward.

The staff won’t simply be sitting around waiting for work. Instead, the city is one of the few able to take advantage of the Smart Growth imitative that allows cities to essentially do one overall environmental study of various growth concerns such as air quality. That means once the city drafts and adopts Smart Growth policies with impact data and how to mitigate problems that can be used as a boilerplate of sorts.

That would mean the approval process for developments would be reduced plus redundant environmental work would be eliminated.

The overall cost to keep the eight Community Development positions for 12 months is more than $500,000. A Smart Growth Grant is being used to augment the development fees.

The city is using $90,000 in air mitigation development fees collected in the mid-1990s but then no longer assessed on projects to help fund the personnel as a match to the Smart Growth Grant. Another $235,680 is in development services fees the building community agreed to have assessed on them during the high growth period of the last decade. Manteca couldn’t handle the work volume in a timely manner due to growth demands. The fees were meant to help ease that situation. The remaining $115,005 is in the form of development agreement fees or bonus bucks collected for sewer allocation certainty for home builders. Bonus bucks fees have since been suspended.

Using the public safety endowment fund to pay for four new officers that provided Manteca with a gang suppression unit for the first time since 2008 isn’t impacted by the budget delay.

That’s because the council voted last month to access the money so the gang unit could be up and running by July 5.