City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2026-00750 4/14/2026
Establishing the Rental Housing Inspection Program (RHIP) Reserve Project and Policy File ID: 2026-00750
Location: Citywide
Recommendation: 1) Pass a Motion adopting the Rental Housing Inspection Program (RHIP) Reserve and RHIP Project Management Policy; and 2) adopt a Resolution authorizing the City Manager or designee to: a) establish a multi-year operating project (MYOP) for the RHIP Reserve project (I80000200); and b) establish the expenditure budgets for the project in the amount of $1,025,000.
Contact: Allison Narramore, Supervising Financial Analyst, (916) 808-7935, [email protected], Community Development Department Presenter: None
Attachments:
1-Description/Analysis
2-Resolution
3-Rental Housing Inspection Program (RHIP) Reserve and RHIP Project Management Policy Description/Analysis
Issue Detail: In 2006, the City Council implemented a pilot Rental Housing Inspection Program (RHIP) to improve the condition of the City’s rental housing stock and ensure compliance with minimum health and safety standards. Following the success of the pilot program, the City Council adopted an ordinance and resolutions establishing RHIP as a permanent, citywide program and affirming Council’s intent that the program operates on a fully cost-recovered and self-sustaining basis.
RHIP revenues have periodically exceeded annual operating expenditures. Consistent with prior budget resolutions, including Section 17.2(G) of the City’s budget resolution, excess revenues have been accounted for in a balance sheet account rather than a dedicated project. While this approach preserved funds for future program use, it limited transparency and constrained the City’s ability to clearly plan for revenue fluctuations, program growth, and one-time operational needs.
File ID: 2026-00750 4/14/2026
Establishing a dedicated RHIP Reserve project and adopting a formal RHIP Reserve and Project Management Policy will align RHIP financial practices with current City standards, improve visibility of available resources, and ensure that funds are used consistently with Council intent.
The proposed action addresses this issue by formally establishing the RHIP Reserve and Project Management Policy and authorizing the creation of a multi-year operating project to manage excess RHIP revenues. This framework will allow the City to better manage revenue fluctuations, support one-time program needs, and maintain the long-term financial stability of the Rental Housing and Inspection Program while continuing to reduce reliance on the General Fund.
Policy Considerations: The recommended action requires City Council approval pursuant to Resolution 2025-0162, Section 13. City Council approval is required for the establishment of a multi- year operating project.
Economic Impacts: None.
Environmental Considerations: This report concerns administrative activities that will not have a significant effect on the environment and does not constitute a “project” as defined by the California Environmental Quality Act (CEQA) [CEQA Guidelines Section 15061 (b) (3); 15378 (b) (2)].
Sustainability: None.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: Adoption of the RHIP Reserve and RHIP Project Management Policy and approval of the associated resolution will formalize the management of RHIP revenues in a manner that is consistent with longstanding City Council direction that the program operate as a fully cost-recovered and self-sustaining program.
Establishing a dedicated multi-year operating project for the RHIP Reserve will improve fiscal transparency and provide a clear, structured process to manage excess revenues generated by the program.
The proposed policy clearly defines allowable uses of the RHIP Reserve and provides safeguards to ensure funds are not used for unapproved or unintended purposes. This approach supports financial stability during periods of revenue fluctuation, allows for proactive program planning, and reduces reliance on the General Fund while maintaining continuity of service.
Approval of the recommended action will align RHIP financial practices with current City budgeting standards, enhance accountability, and ensure that program revenues are managed in a transparent and fiscally responsible manner.
File ID: 2026-00750 4/14/2026
Financial Considerations: Staff recommends that the City Council authorize the establishment of the RHIP Reserve project (I80000200) and establish an expenditure budget in the RHIP Reserve project (I80000200) from existing General Fund (Fund 1001) balance sheet amount as of the end of FY2024/25 in the amount of $1,025,000.
The Community Development Department and the Finance Department will annually review the RHIP Division’s revenue and expenditure budgets and adjust the expenditure budget in the RHIP Reserve project (I80000200) based on excess revenue received. This action has no net impact on the General Fund, as the Rental Housing and Inspection Program is fully cost recovered through program revenues.
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO. 2026-
Adopted by the Sacramento City Council
ESTABLISH RENTAL HOUSING INPSECTION PROGRAM (RHIP) POLICY AND RESERVE PROJECT (I80000200)
BACKGROUND:
A. In 2006 the City Council implemented a pilot Rental Housing Inspection Program (RHIP). The program was successful and in August 2007, the Mayor and City Council requested staff return to City Council for adoption of a citywide RHIP.
B. March 4, 2008, Council adopted an Ordinance adding Chapter 8.120 of the Sacramento City Code related to rental housing inspections.
C. March 4, 2008, Council approved Resolution 2008-0135 approving fees, staffing, and resources for RHIP, as defined in Sacramento City Code 8.120.050, and directed staff to establish the program.
D. March 25, 2008, Council adopted Resolution 2008-0173 approving a $284,920 adjustment to the FY2007/08 approved budget for 10.5 FTE staff to begin implementation of RHIP.
E. November 25, 2008, Council adopted an Ordinance amendment to Section
8.120.210 of the Sacramento City Code; added Sections 8.120.220 through
8.120.270 relating to the collection of unpaid fees, costs or charges; and amended Section 8.120.050 related to the establishment of fees.
F. June 23, 2009, Council adopted an amendment to Resolution 2008-0135 and established Resolution 2009-0411 authorizing the carryover of FY2008/09 excess revenues for the RHIP provided that full cost of the current year operations for RHIP had been recovered; and provided clarification of the original intent of the original ordinance and resolution that RHIP be self-sustaining.
G. May 28, 2013, Council adopted Ordinance 2013-0013 amendment to Section
8.120 of the Sacramento City Code and passed Resolution 2013-0171 updating the fees and penalties relating to RHIP.
H. May 14, 2024, Council adopted Resolution 2024-0153 approving an increase to fees and penalties related to RHIP.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1.
The City Manager or City Manager’s designee is authorized to establish the Rental Housing Inspection Program Reserve Project (I80000200) as a new multi-year operating project.
Section 2.
The City Manager or City Manager’s designee is authorized to appropriate RHIP reserve commitment of General Fund balance in the amount of $1,025,000 to project I80000200.
Rental Housing Inspection Program (RHIP) Reserve and
Project Management Policy
Scope: CITYWIDE
Policy Contact
Department of Community Development
Allison Narramore
(916) 808-7935
[email protected]
Table of Contents
Purpose
Background
Policy
Regulatory References
March 4, 2008 Ordinance No. 2008-0012 (Section 8.120) Resolution 2008-0135
March 25, 2008 Resolution 2008-0173
November 25, 2008 Ordinance No. 2008-0055
Section 8.120.210 (Amendment)
Section 8.120.220 through 8.120.270 (Added)
June 23, 2009 Resolution 2009-0411
May 28, 2013 Ordinance No. 2013-0013 (Section 8.120 Amended) Resolution 2013-0171
May 14, 2024 Resolution 2024-0153
RHIP Reserve and Project Management Policy
1. PURPOSE
The purpose of the RHIP Reserve and Project Management Policy is to ensure the prudent management of RHIP reserve funds for the public and City of Sacramento. The reserve will be used for two purposes: 1) to bridge gaps between budgeted and actual RHIP revenues in the Community Development Department (CDD) during periods of revenue decline; and 2) to cover one-time expenses as program growth continues to increase.
2. BACKGROUND
On July 27, 2004, the Sacramento Housing and Redevelopment Commission’s Task Force recommended to the Sacramento City Council that a housing inspection program be established in the City to improve the residential rental housing stock by bringing standard rental properties into compliance with health and safety standards and codes.
Between May and September 2005, the Code Enforcement Department conducted several stakeholder meetings coordinated by the Sacramento Mediation Center. During this process the stakeholders group reviewed and discussed a draft rental inspection ordinance.
In March 2006, the City Council approved the implementation of a pilot program. It initially focused on inspection efforts in areas of the city that reflected a combination of factors including, but not limited to, areas that showed higher concentrations of housing and dangerous building cases, neighborhood code enforcement cases, and police and fire calls for service. The key features of the proposed pilot program included: that no fees would be charged to property owners for initial inspection; the program would generate revenue to cover costs of the program; the program would be implemented quickly; its implementation was under existing authority and did not require an ordinance; and the pilot program would allow staff to evaluate the program, track the progress of proactive residential rental inspections, and report back findings and future recommendations.
In March 2008, Council adopted an ordinance by adding Chapter 8.120 of the Sacramento City Code related to rental housing inspections. Council also approved Resolution 2008- 0135 approving fees, staffing, and resources for RHIP as defined in Sacramento City Code
8.120.050. Later in the month of March 2008, Council approved Resolution 2008-0173 approving a $284,920 adjustment to the FY2007/08 approved budget for 10.5 FTE staff to begin implementation of RHIP.
In November 2008, Council adopted an ordinance amendment to Section 8.120.210 of the Sacramento City Code; added Sections 8.120.220 through 8.120.270 relating to the collection of unpaid fees, costs, or charges; and amended Section 8.120.050 related to the establishment of fees.
In June 2009, Council adopted an amendment to Resolution 2008-0135 and established Resolution 2009-0411 authorizing the carryover of FY2008/09 excess revenues for the program provided that full cost of the current year operations for RHIP had been recovered and provided clarification of the original intent of the original ordinance and resolution that RHIP be self-sustaining.
Residential Rental Housing Inspection Program (RHIP) Reserve and RHIP Project Management Policy In May 2013, Council adopted an Ordinance 2013-0013 amendment to Section 8.120 of the Sacramento City Code and passed Resolution 2013-0171 establishing the fees and penalties relating to RHIP.
In May 2024, Council adopted Resolution 2024-0153 approving an increase in fees and penalties related to RHIP.
3. POLICY
The RHIP Reserve shall be established as set forth below and any changes to the policy will be presented to and approved by City Council.
(a) The RHIP costs shall be fully offset by direct revenues. (b) All revenues recovered for the provision of RHIP shall be used to cover direct and indirect costs to reduce the General Fund subsidy for this program. (c) The RHIP reserve goal is one year’s worth of RHIP revenues. (d) Beginning with FY2025/26, if full cost of current-year operating for the program has been received, then excess revenues for that program will be recognized in CDD’s operating budget and the expenditure budget will be adjusted in the RHIP Reserve project (I80000200) in tandem up to the amount equal to one year’s revenue budget for the program.
(e) The RHIP reserve will be used to bridge gaps between budgeted and actual RHIP operating variance and for one-time purchases as determined by the City Manager or Designee.