Long Beach Technology Contract Costs to Rise by Millions

The city faces higher mainframe expenses as administrative technology projects experience multi-year delays.

Updated on Oct. 20, 2026 in Remote Work

Bold flat-color editorial illustration of stacked server volumes, evoking the structural weight of municipal technology infrastructure. — Long Beach officials have increased a technology contract with Kyndryl by $6.5 million, extending reliance on legacy mainframe systems through 2029. AI Illustration. Upload story photo >

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Long Beach officials are moving to increase a technology contract with Kyndryl by approximately $6.5 million to sustain mainframe operations. The proposal follows delays in the LBCOAST Phase 2 project that have forced the city to extend its reliance on legacy systems through September 2029.

Why it matters

The extension highlights the operational challenges municipalities face when legacy infrastructure modernization projects, such as LBCOAST Phase 2, encounter years of delays. Operators should note that the city is increasing its annual mainframe spending by $1.1 million to support critical budgeting and payroll software.

The proposed contract amendment adds $6,498,212 in spending, raising the total authorized value for the Kyndryl agreement to roughly $12.5 million. Annual costs for mainframe operations will climb to approximately $2.17 million, an increase of $1,106,071 over current levels.

The players

Kyndryl

A New York-based technology services firm that provides managed infrastructure and IT consulting for large-scale enterprise and government clients.

Long Beach City Council

The local governing body in Long Beach responsible for approving municipal budgets and technology procurement contracts.

IBM

A multinational technology corporation known for developing and supporting long-term enterprise hardware and software solutions.

The details

Long Beach originally utilized hardware purchased from IBM in 2008 for its core administrative systems, including payroll and human resources. The city eventually migrated these operations to a Kyndryl-hosted environment as part of an effort to modernize its digital footprint. Due to delays in the LBCOAST Phase 2 initiative, the city must now perform additional technical assessments and platform upgrades to maintain system stability while it works toward a eventual transition to newer application architectures.

2008: Long Beach originally purchased mainframe hardware from IBM.
January 2022: City acknowledges significant LBCOAST Phase 2 implementation difficulties.
August 2023: City Council approves initial agreement with Kyndryl.
October 20, 2026: City Council scheduled to consider the new contract proposal.
September 30, 2029: Proposed contract amendment expiration date.

Market Landscape

The contract extension follows the extended delays of the LBCOAST Phase 2 project, which was intended to modernize the city's legacy digital environment. This development marks a shift from the city's original plan to move away from IBM hardware quickly toward a longer-term reliance on hosted mainframe support.

Operators in sectors reliant on complex legacy software should audit their own modernization roadmaps to account for potential multi-year project slippage. Prepare for sustained IT maintenance costs if your operations depend on aging infrastructure that lacks a clear, imminent exit strategy.

The takeaway

Legacy systems often require expensive service extensions when large-scale software migrations fall behind schedule. Monitor your internal vendor contracts for similar platform-dependence clauses, and prepare for potential cost increases if your primary technology partner needs to provide extended support for outdated infrastructure.