Check with your cities building department you may have to run new water and sewer lines back to the main which can be costly if you didnt budget for it.

The property has several citations from building code department and not sure if the seller has a certificate of compliance. 

Besides calling the building department to make sure the home was built legally, is there any any other questions I should ask?

If you really want to know I'd check with your local building department's electrical inspector and/or fire Marshall. 

The police officer arrived and, showing little to no sympathy toward the owners in what was apparently an act of criminal trespass, told them to contact the Sheriff’s Department, which is currently closed until the after holiday.However, the Officer did agree to talk to the individual in the house and ask for his ID and ask him some questions about his illegal occupation of our property.

However, I'm worried that the delay would cause problems with the City's Code Enforcement department which have been patiently waiting for us to complete this project since December.

In some municipalities (Windcrest & Balcones Heights) you will get a call from the Police Department or Chief of Police.

I want my tenants to have the peaceful and respectful use of the property - it's their home - and in return I expect rent to be on time -every single time, issues to be promptly reported, and that they use/depart my property in the same condition received or better. 

CA has debatably the most aggressive department of revenue in the country. 

In NJ health department is in charge of septics.