Silver iodide (the chemical the city intends to use) is a toxic metal halide. Here and here are links to safety data sheets concerning silver iodide.
Cloud seeding has not been proven effective during a drought. See the last two paragraphs of this article for a link to more info on this.
This is an environmental and ecological experiment since we really do not know the effects of this type of intervention on the climate, atmosphere, land, people, animals, water, etc.
As long as citizens continue to erode and strip the soil of all moisture and nutrients, this problem will persist and cloud seeding can be considered no more than an attempt at a band-aid solution.
If the city is actually interested in improving conditions, our money would be better spent educating and promoting self-sustaining, moisture-retaining farming, ranching, landscaping, and gardening practices.
Many view this type of intervention as an effort to usurp God's power and do not want their money supporting that type of work.