Long Beach Proposes $6.5 Million Tech Contract Increase

The city looks to extend its mainframe support agreement with Kyndryl through 2029.

Updated on Oct. 20, 2026 in Remote Work

Isometric editorial illustration of a heavy industrial concrete server structure with exterior cabling, representing municipal IT infrastructure. — Long Beach city officials have proposed a $6.5 million contract increase to maintain legacy mainframe infrastructure through 2029. AI Illustration. Upload story photo >

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Long Beach officials have proposed a $6.5 million increase to a technology contract with Kyndryl to support the city's aging mainframe infrastructure. The City Council is expected to vote on the extension on October 20, 2026.

Why it matters

The city requires additional time to complete modernization efforts after the LBCOAST Phase 2 project faced years of delays. Officials must now maintain existing mainframe operations longer than originally anticipated.

The proposal would raise annual spending on mainframe operations to $2.17 million, representing an annual cost increase of $1,106,071. Additionally, the city is considering a separate $674,673 contract for Optimizely website upgrades.

The players

Kyndryl

Kyndryl is a global IT infrastructure services provider that was spun off from IBM in 2021.

Long Beach City Council

The Long Beach City Council is the legislative body responsible for governing the city and approving its municipal contracts.

IBM

IBM is a multinational technology corporation that specializes in computer hardware, software, and cloud services.

Optimizely

Optimizely is a digital experience platform provider used by organizations to manage website content and experimentation.

The details

The contract amendment extends services through September 30, 2029, allowing the city to continue using a Kyndryl-hosted environment for critical systems like payroll and human resources. The city originally purchased the mainframe hardware from IBM in 2008 and is now performing necessary technical assessments to bridge the gap during its delayed digital transformation.

2008: The city originally purchased mainframe hardware from IBM.
January 2022: The city acknowledged significant LBCOAST Phase 2 implementation difficulties.
August 2023: The City Council approved an initial agreement with Kyndryl.
October 20, 2026: The City Council is scheduled to consider the contract proposal.
September 30, 2029: This is the proposed expiration date for the contract amendment.

Market Landscape

This extension reflects a broader trend of municipal entities struggling to migrate legacy mainframe systems, often known as technical debt, to modern cloud environments. By choosing to host existing systems rather than purchasing new hardware, the city is prioritizing stability over a full system overhaul.

The proposed expenditure aims to ensure that core city functions, including payroll and human resources, remain operational during the extended modernization period. Taxpayers and city employees should expect continued reliance on existing digital systems until the transition project is completed.

The takeaway

Maintaining legacy infrastructure often requires unexpected budget increases when long-term modernization projects experience significant delays. Agencies facing similar challenges should prioritize technical assessments to ensure that essential services remain functional during extended transition periods.