Dallas Weighs AI, IT Consolidation in $5.4B FY 2027 Budget Work

Dallas officials are weighing technology consolidation, artificial intelligence and 311 modernization as they work to close a projected general fund gap in a proposed $5.4 billion fiscal year 2027 budget.

During a May 6 City Council briefing, City Manager Kimberly Bizor Tolbert told councilmembers that the city is continuing to review service delivery models, organizational structure and service priorities as staff develops the fiscal year 2027 budget. She said the city has already used department consolidations, contract reviews, staffing changes, technology and other efforts in recent budget cycles and will continue that approach next year.

Tolbert also said Dallas is trying to move away from isolated department-level technology decisions and has started laying out an IT improvement road map under IT Services CIO Jeffrey Stovall.

City budget staff identified technology costs as one expense pressure while also describing technology consolidation and AI as possible efficiency strategies. The city’s budget presentation lists a $2.4 million FY 2027 increase for IT, including $1.9 million from the general fund. Janette Weedon, director of Budget and Management Services, said known technology increases of about $2.6 million are among the fiscal pressures not included in the FY 2027 planned budget.

Staff also identified a $9 million change related to 911 operations, saying the planned budget had included a one-time reimbursement from the 911 fund balance that was removed to ensure ongoing expenses are covered by ongoing revenue.

The presentation identified specific public safety technology costs, including $1.1 million in FY 2027 planned funding for Axon and $900,000 for Verkada. Another $2.6 million for Axon was listed as not included in the FY 2027 planned budget, while the presentation also identified $9.5 million in additional FY 2028 Axon costs and $1.9 million in additional FY 2028 Verkada costs.

The city has an assumed $37.7 million gap between general fund expenses and revenue in FY 2027. Staff said they will continue updating assumptions and present a balanced budget recommendation to council Aug. 11.

Technology is also part of the city’s strategy for addressing that gap. Weedon said Dallas is looking at innovation, operational efficiency and service delivery changes, including consolidating technology to reduce duplication and using AI to streamline operations and support staff capacity.

Chief Financial Officer Jack Ireland told councilmembers the city has already used technology to change internal operations. He pointed to an upgraded financial system that allowed Dallas to eliminate some accounts payable positions because invoices can now be processed differently. He also said data made available through AI, including cameras installed on sanitation equipment for code and sanitation work, is an example of how technology can help move efficiencies forward.

Tolbert said the city is looking to “completely revamp” the use of AI in its 311 system as part of a broader modernization effort. She said the review is intended to help determine how many live agents are needed and how much work could be handled by AI without reducing service quality.

The budget discussion also touched on how Dallas pays for technology and other long-term assets. Ireland said the city has used general obligation debt for equipment acquisition and technology improvements, including technology for the Dallas Police Department. Equipment acquisition notes, which are paid from the debt service fund, are also used to finance fleet equipment and technology.

The May 6 briefing is part of a longer budget process. Staff said they will continue reviewing revenue assumptions, expenses and council priorities before presenting the city manager’s recommended budget in August.