CIO warns of rising technology costs, longer lead times driven by AI demand

Scott Newman, Chief Information Officer, briefed the committee on cost and supply pressures affecting municipal IT. Relying on Gartner analysis, Newman said cloud services that were expected to rise ~2.8% are showing real‑world increases of 10–20% this year; by 2027 the expectation is that "a majority of the organization's applications will increase by at least 40%" because vendors are bundling AI features and charging premiums. He also described extended lead times for networking equipment (6–14 months) and large recent price increases for servers and storage tied to AI demand.

Newman listed steps the city is taking to mitigate cost and supply risks: earlier renewals where practicable, pursuing multi‑year agreements when budget rules permit, using leasing vendors to secure upfront multi‑year pricing, consolidating redundant technologies across departments, and working with procurement and city management to consider emergency purchases if limited‑time vendor quotes arise. Council members expressed support for further procurement flexibility and asked IT to return with additional information if needed.