Despite few permitting and inspection work fees that pay for six employees, Kissimmee commissioners decided Tuesday that the city’s building division would stay in-house, using a $110,000 general fund subsidy to sustain it for the next year.

During their workshop this week, commissioners discarded two other options suggested by staff for managing the funding disparity resulting from the construction market downturn: consolidate the building division with Osceola County’s similar department, moving offices from Kissimmee City Hall into the county’s administrative building; or privatize the division and contract out the service.

But generally, commissioners agreed that subsidizing the division with property tax revenue would be worth the high level of service a smaller, city-run operation would provide.

“I think we need to find $100,000 to keep the building department,” Mayor Jim Swan said, even before the other options were presented.

Before this week, the building division was supported entirely by fees paid for permits and inspections needed in construction projects within the city. Three years ago, those fees and the corresponding work supported 22 approved positions. The division is down to six employees working on a reduced week – five staff paid for 35 hours and a building official paid for 21 hours.

Still, with inspection turnaround times and permit review times the same as when the division was fully staffed, customer service has been largely unaffected, Development Services Director Craig Holland said.

What has fallen are the division’s reserves, which could be entirely depleted within two or three months, Holland said. No new construction projects are occurring in the city, other than remodels and additions, he added.

“Even if we have hundreds of thousands of dollars in reserves, we just don’t have the work right now,” City Manager Mark Durbin said. “We know that the last two months have been better than expected. Will that continue? I don’t know. We’re estimating worst-case scenario.”

Commissioners agreed to subsidize the division, with the caveat that they receive reports on the division’s health every three to four months, so they could look at other options if it becomes a substantial financial drain on the general fund.

“I prefer to keep my employees in-house to satisfy our needs, the best way we can,” Commissioner Carlos Irizarry said.

Commissioner Art Otero suggested the city put out a bid request now to contract out the work, so that in four or five months the commissioners could have some specific costs on privatization if they decide to look at other options.

“It’s just to have options. I don’t want to be in the situation that when it comes to that time, we are struggling, looking for money in there,” he said. “At least we already have something in place that we can look at it and say, ‘OK, yes.’”

Swan said he disagreed mostly with the timing of Otero’s proposal.

“I’m not ready to take that step yet, because I’m not going to panic over $115,000 for the next 12 months,” he said. “I don’t want the staff to go out and have to write (a bid request) and waste a bunch of time, if the majority of the commission is willing to invest some funds and keep it all in-house for a while.”

Consolidation with the county also would impede the city’s goal of eventually creating a one-stop development review and permitting center, which could become a reality when Toho Water Authority moves into its new building, freeing up office space in City Hall, Holland said.