Council probes IT budget spike, asks for AI policy and itemized server costs

Pat and Stephanie presented the Information Technology budget and told the council that FY27 operating expenses rise materially compared with prior years, driven by contract services, PC refreshes and data-center/server needs. Pat said operating expenses increased about $370,310 (roughly 24.3%) and flagged a proposed $100,000 allocation for a closed, internal AI system trained on local ordinances, council packets and historical materials.

Council members pressed for an itemized explanation of what is producing the large dollar swing — one member observed that the FY27 request of roughly $1.8M is substantially higher than FY24/25 actuals — and IT staff said certain server and VM-host replacements are carryovers from FY26 and that data-center hardware quotes are elevated (preliminary equipment quotes exceeded $200,000). IT staff noted that some PC replacement costs would be rolled from the current year rather than new asks.

On AI, council voiced caution. Members characterized $100,000 as an initial, limited pilot and asked for a formal AI policy, ethical guidelines, user training requirements and a cybersecurity/compliance plan (including federal and public-safety compliance). IT staff described plans for a closed system and for onboarding controls (personnel handbook signoffs, staged rollouts and cybersecurity insurance coordination).

Council also discussed the age of server hardware (presented as roughly nine to ten years old), the difficulty of timing replacements amid elevated vendor pricing and the potential multi-year nature of any ERP/accounting system update. No formal approvals were taken; council directed staff to return with a clearer itemization of operating and capital increases, a detailed AI use-case plan and the security/compliance framework prior to larger expenditures.