Transforming City Operations: How Villa Park and DataON Deliver Real-Time Decisions with Edge RAG

Microsoft

Nov 18, 2025

In today’s connected world, customers expect instant, context-rich interactions- even in environments where cloud connectivity isn’t guaranteed. That’s where Edge Retrieval-Augmented Generation (RAG) at the edge comes in. Edge RAG, enabled by Azure Arc, combining local data retrieval with intelligent reasoning to empowers conversational experiences that are fast, secure, and deeply personalized. Together with our Edge Infrastructure partners, we’re applying this technology to transform customer engagement - enabling real-time insights, autonomous workflows, and resilient operations across industries. Edge RAG is a core part of our Adaptive Cloud pillar for Edge AI, ensuring flexibility, resilience, and intelligence wherever customers operate. It uses Foundry language models and together with Foundry Local shape Microsoft’s Foundry Anywhere commitment.

Today we’re excited to announce a public preview refresh of Edge RAG at Ignite 2025, bringing new capabilities to accelerate adoption and unlock even more value at the edge:

Production-Class LazyGraph RAG with Industry-leading RAG inferencing quality

High-Fidelity Parsing: OCR-enabled support for documents, tables, and images

SharePoint Server integration (limited access; to register, click here )

Multimodal search with image retrieval & image-rich outputs

Chat UI Upgrades and performance improvements

Fully Disconnected scenarios enabled by Azure Local for Disconnected Operations

The new features in this release are informed by our engagement with the City of Villa Park, in partnership with DataON, where we’ve applied Edge RAG to improve operational efficiency and deliver smarter, real-time services for urban environments. Together, we pilot compliance assistant agentic workflow with OCR & LLM integration.

Villa Park: A Blueprint for Smart Cities

The City of Villa Park, California, faced challenges common to many municipalities: complex zoning regulations that slowed approvals, lengthy CEQA compliance processes requiring deep environmental analysis, backlogs in accessory dwelling unit (ADU) permit reviews.

Working with DataON, a Microsoft partner, and Microsoft, Villa Park deployed Edge RAG on Azure Local, creating a resilient, intelligent planning system that operates seamlessly; even offline. Environmental assessments that once required days are now completed in minutes. The partnership between the City of Villa Park and DataON is a standout example of how municipalities and technology providers can co-innovate to solve real-world challenges.

Ray Pascua, Villa Park’s Planning Manager, has led this transformation:

“Having the opportunity to utilize AI to perform research and retrieve large datasets specifically from the California Environmental Quality Act (CEQA) Guidelines (Statutory/Categorical Exemptions), and State law relative to Accessory Dwelling Units (ADUs), has been an overall positive experience. AI algorithm is a revolutionary medium that can streamline and improve workflow efficiencies by automating routine and repetitive planning-related tasks and analysis, and would be of particular value and benefit to local government agencies that have limited personnel and resources. While this cutting-edge technological tool is still evolving and has room to improve accuracy and speed, it certainly has a place in the realm of City Planning, as well as other land use development fields and disciplines.”

Howard Lo, VP of Sales & Marketing at DataON, shares:

“Our collaboration with Microsoft and the City of Villa Park showcases Azure Local's transformative potential for municipal government AI. As a leading Azure Local partner, DataON has optimized our infrastructure to run Microsoft's Edge RAG solution, enabling Villa Park to address real planning challenges while maintaining data control and security. Working directly with Microsoft's engineering team and a forward-thinking city partner, we've proven that Azure Local delivers practical AI value for government operations. We're excited to help other municipalities achieve similar results on our Azure Local platform.”

Villa Park’s deployment leverages DataON’s Azure Local-certified hardware, Microsoft’s Arc-enabled AI stack, and the expertise of city planners to deliver:

End-to-end digital workflows for CEQA, zoning, and ADU permitting

Conversational AI interfaces that empower staff to ask questions and get cited, regulatory-compliant answers instantly

Operational resilience with full offline support, ensuring continuity even during network outages

A replicable model for other municipalities seeking to modernize planning and compliance

About DataON

DataON’s edge infrastructure, combined with Azure Local and Edge RAG, forms the core of this transformation. DataON provides robust hardware and delivers deployment, integration, and training services, ensuring a seamless Azure Local experience. Their close support helps organizations quickly adopt and confidently manage edge solutions, resulting in secure, high-performance, and scalable deployments for multi-site environments.

Let’s take a closer look at the features we’re announcing today:

Deep Search for Complex Reasoning with LazyGarph RAG

With the Ignite release, Edge RAG introduces Deep Search powered by LazyGraph RAG; a dynamic graph-based retrieval method that enables advanced, multi-document reasoning. This means Villa Park planners can now ask complex, multi-part questions that span zoning, CEQA, and ADU regulations, and Edge RAG will synthesize answers by connecting information from multiple sources in real time.

Image 1: Deep Search capabilities on Edge RAG

The system incrementally explores only the most relevant document chunks, reducing compute cost and latency while delivering comprehensive, cited responses. For Villa Park, this translates to resolving intricate regulatory scenarios, such as “What are the environmental constraints for ADUs in zones X, Y, and Z?”. With answers that reference and link multiple regulatory documents and historical decisions, all in a single query.

Advanced Document Parsing for Structured Data

Edge RAG’s advanced document parsing, introduced in this release, transforms how Villa Park’s planning documents are utilized. During data ingestion, the system now extracts not only free-form text but also tables, images, headings, and rich metadata. This includes full indexing of multi-page tables, column headers, and section context, with each chunk annotated by page number, section heading, and table index. As a result, planners can search for specific permit statistics, environmental impact scores, or compliance tables and retrieve results directly from structured data within city documents; enabling precise, source-attributed answers that were previously difficult or impossible to obtain.

Image 2: Advanced document parsing on Edge RAG

Enhanced Chat Experience

The new model-only chat mode allows staff to interact directly with the language model, bypassing contextual data for general queries or troubleshooting. This flexibility enables Villa Park staff to quickly switch between knowledge-based chat-grounded in city data, and model-only chat for training, testing, or handling ambiguous queries, streamlining both day-to-day operations and onboarding of new team members.

Additional Edge RAG Preview Refresh Updates

We also improved Edge RAG based on customer feedback, adding these features:

Agentic RAG for autonomous workflows: Systems can reason and act at the edge with less manual work.

Full offline support: Operates and accesses data even without a network.

SharePoint integration (private preview): users will also be able to query Edge RAG directly over SharePoint, enabling enhanced information retrieval and analysis within their workflows.

Image 3: Sharepoint as a data source on Edge RAG

Performance optimizations: Query responses for every search type, excluding Deep Search, are now delivered in under 15 seconds on legacy A2 and A16 GPUs; a fivefold speed boost. Additionally, streaming image processing has increased one hundred times, allowing 600 images to be handled continuously in just 36 seconds.

Since late May, Edge RAG has supported “bring your own model” (BYOM), allowing organizations to deploy their preferred language models such as OpenAI GPT-4o or other advanced models, directly on their own infrastructure. This capability enables advanced features like deep search and hybrid multimodal search, while ensuring that sensitive data remains on-premises. BYOM empowers organizations to tailor Edge RAG’s AI capabilities to their unique compliance, performance, or customization requirements, maintaining full control over both data and model selection.

Security, Compliance, and Sustainability

Edge RAG is built for trust: data sovereignty ensures sensitive data remains on-premises, zero-trust architecture integrates with Microsoft security stack, and compliance-ready design supports municipal, state, and industry regulations. Sustainability is also a priority, with energy-efficient edge hardware reducing carbon footprint.

Looking Ahead: The Future of Edge Intelligence

Edge RAG enables flexible edge intelligence deployment in various environments. Its adaptable design handles dynamic workloads, supporting frontline teams as operations evolve. Instead of just speeding up processes or boosting connectivity, Edge RAG fosters innovative applications and smarter decision-making, helping organizations stay agile amid changing technology and business needs.