Jason Peters is the AI & data solutions lead for VC3. He can be reached at jason.peters@vc3.com.

AI, AI, AI. It seems like the world cannot stop talking about artificial intelligence. It’s likely you’ve already experimented with or rely on basic AI tools for your day-to-day job. With AI becoming a part of so many workflows, it’s likely you will find yourself investing in it more. But before you invest in AI tools or platforms, you need to first understand your AI-preparedness. A comprehensive AI readiness assessment looks at your:

• Data quality and accessibility: Is your data accurate, organized, and usable for AI tools?
• Security and compliance: Are the necessary security controls in place to safely use AI without exposing sensitive information?
• Technology infrastructure: Do your systems support the performance and integrations required for AI-enhanced tools?
• Policies and governance: Do you have clear guidelines for safe, ethical AI use and data handling?
• Staff preparedness: Are employees trained in how to use AI responsibly?

These improvements typically require their own budget allocation and should be prioritized early in your AI planning process. This way, you’re building AI capabilities on a solid foundation rather than introducing tools into an environment that may not be fully prepared. After you’ve assessed your AI readiness, consider the following seven key AI investments.

1. Enhanced productivity tools

One of the simplest and most impactful AI investments is licensing productivity tools. You might already use Microsoft 365, which now has an AI-powered assistant that helps automate tasks, draft documents, and analyze data. Many of your employees have probably experimented with Microsoft Copilot and other such tools to answer questions, draft copy, or summarize long documents.

Paid versions of these tools often unlock advanced features. For example, Copilot integrates with common productivity tools such as Microsoft Word, Excel, or Teams. Their processing power, the number of questions you can ask, and real-time web browsing capabilities are also increased.

Why are these smart investments? Municipal staff across various departments can save valuable hours each week by using AI to summarize reports, generate presentations, and draft responses to common inquiries. By eliminating or minimizing the time involved with repetitive, tedious tasks, your staff can focus more on strategic projects and better service delivery.

2. Stronger cybersecurity monitoring

Cybersecurity threats are growing more sophisticated, and traditional tools simply cannot keep up. Cybercriminals now leverage AI to launch increasingly legitimate-looking phishing attacks, automatically scan for system vulnerabilities, and enhance attacks. AI-powered malware can learn from its environment, evade detection, and change tactics in real time.

That’s why many baseline cybersecurity tools now leverage AI to more quickly and accurately detect and respond to threats. For example, Endpoint Detection and Response solutions use AI to analyze behavior patterns, detect anomalies, and quarantine threats before they spread. AI also helps IT professionals monitor network traffic, enhance email security, detect unusual login patterns, and analyze security data across multiple tools.

3. Quicker data analytics

Municipalities generate enormous amounts of data — from water usage to economic indicators. But manual analysis can be slow and resource intensive. AI-powered analytics platforms can help turn this data into actionable insights. Imagine being able to more easily predict water demand, optimize traffic flow, or identify economic development opportunities in real time.

However, effective AI analytics require strong data governance. Your budget should include investments to ensure your data is clean and AI-ready. Without proper governance, AI tools can produce inaccurate or biased answers, summaries, and results.

4. Chatbots and virtual assistants for resident engagement

Residents expect quick, convenient access to information — often outside normal business hours. Many municipalities rely on their website to help answer resident questions, but that information may be outdated, hard to find, and lack interactive guidance for complex questions.

AI-driven chatbots and virtual assistants can answer common questions, guide users through online forms, and enhance your website’s responsiveness. These tools don’t replace human interaction. Instead, they allow your staff to focus on more complex resident issues while AI handles common inquiries. Plus, these tools enhance accessibility for residents who prefer digital communication over in-person visits or a phone call.

5. Integrations within existing systems

You don’t always need to buy new software to leverage AI. Many existing systems — such as permitting platforms, enterprise resource planning systems, and financial applications — are introducing AI features to improve functionality. These integrations can automate repetitive tasks, flag anomalies, and provide predictive insights. Reach out to your vendors to understand what AI enhancements are available and how they can benefit your municipality.

6. Staff training on AI tools and responsible use

There’s a difference between personally dabbling with ChatGPT versus using AI for complex business tasks. Enterprise AI tools within municipalities require that employees understand specific workflows, compliance rules, and technical configurations. It’s not just about typing prompts: Without proper training, your AI investments could go to waste or lead to misuse.

Budget for staff training that covers:

• How AI tools work and how they connect to their role.
• Best practices for maximizing productivity.
• Ethical and responsible use (including data privacy and security guidelines).

Training ensures your team understands the benefits and limitations of AI — reducing risks, maximizing your investment, and increasing adoption.

7. Pilot funding for future AI use cases

Finally, consider setting aside funds for pilot projects that explore innovative AI applications. These pilots allow you to test new ideas without committing to full-scale implementation.

Start with pain points. Where do departments struggle the most with efficiency? Which services generate the most resident complaints? Where do departments spend the most on emergency fixes and overtime? Look at what similar municipalities are piloting, consult your IT and software vendors, and consider creating an AI steering committee to collect and evaluate ideas.

Some examples could include:

• Traffic optimization: Use AI to analyze congestion patterns.
• Water management: Experiment with systems that predict demand and detect leaks.
• Predictive maintenance: Analyze data from sensors on public infrastructure and predict failures before they happen.

By funding pilots, you position your municipality to stay ahead of the curve, identify high-impact opportunities, and justify greater investments.

The League of California Cities partners with VC3 to deliver cybersecurity and technology services to cities in California that help protect local governments against cyber threats. To learn more, visit Cal Cities’ cybersecurity solutions webpage. For more information, please email citysolutions@calcities.org or contact VC3 at info@vc3.com.