Climate-driven wildfires are intensifying, particularly in urban regions such as Southern California. Yet, traditional fire risk communication tools often fail to gain public trust due to inaccessible design, non-transparent outputs, and limited contextual relevance. These challenges are especially critical in high-risk communities, where trust depends on how clearly and locally information is presented. Neighborhoods such as Pacific Palisades, Pasadena, and Altadena in Los Angeles exemplify these conditions. This study introduces a community-led approach for integrating AI into wildfire risk assessment using the Participatory AI Literacy and Explainability Integration (PALEI) framework. PALEI emphasizes early literacy building, value alignment, and participatory evaluation before deploying predictive models, prioritizing clarity, accessibility, and mutual learning between developers and residents. Early engagement findings show strong acceptance of visual, context-specific risk communication, positive fairness perceptions, and clear adoption interest, alongside privacy and data security concerns that influence trust. Participants emphasized localized imagery, accessible explanations, neighborhood-specific mitigation guidance, and transparent communication of uncertainty. The outcome is a mobile application co-designed with users and stakeholders, enabling residents to scan visible property features and receive interpretable fire risk scores with tailored recommendations. By embedding local context into design, the tool becomes an everyday resource for risk awareness and preparedness. This study argues that user experience is central to ethical and effective AI deployment and provides a replicable, literacy-first pathway for applying the PALEI framework to climate-related hazards.