Title
Establishing the Rental Housing Inspection Program (RHIP) Reserve Project and Policy
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FileID
File ID: 2026-00750
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Location
Location: Citywide
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Recommendation
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.
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Contact
Contact: Allison Narramore, Supervising Financial Analyst, (916) 808-7935, anarramore1@cityofsacramento.org, Community Development Department
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Resolution
3-Rental Housing Inspection Program (RHIP) Reserve and RHIP Project Management Policy
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Description/Analysis
IssueDetail
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.
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.
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PolicyConsiderations
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.
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
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)].
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Sustainability
Sustainability: None.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
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.
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FinancialConsiderations
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.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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