Kempner City Council last week decided to go forward with funding for the purchase of property for a new City Hall. Mayor Gene Isenhour said the council will consider various alternatives for the possible construction of a new facility.

In an associated action, the council approved an agreement with Specialized Public Finance Inc. for financial advisory services to obtain funding for the proposed project.

In a workshop session prior to the regular meeting, Gary Kimball, managing director of Specialized Public Finance, explained the process to obtain financing for a new City Hall.

“Our company guides clients through all phases of the debt issuance process by applying our financial and technical expertise, market knowledge and personalized service,” he said.

The Austin-based firm is the fourth-largest public financing firm in Texas. It advises municipalities on the issuance of bonds and notes to finance public infrastructure. The company represents several nearby cities plus Lampasas County.

Kimball recommended that Kempner finance the city project with limited tax notes. Limited tax notes are a security that a bank or insurance company would be interested in purchasing. The interest rate would be around 4 percent, he said, and when the notes were sold, the city would pay a fixed rate.

“We conduct a competitive sale and would sell to one entity at the best interest rate,” Kimball said. “The firm does collect a percentage fee for the service, but if for any reason the city decides not to go through with a new City Hall, you do not owe us a dime.”

Isenhour said if the city decides to purchase property and construct a municipal facility, the cost of a 3,000-square-foot building would be about $150,000, plus the cost of land. Kimball said the total cost of the project could approach several hundred thousand dollars.

In other matters, the council OK’d an agreement with Thomas Pollan, bond counsel with Bickerstaff, Heath, Delgado and Acosta, LLP. Bond counsel will represent the city in presenting the limited tax notes sale to the Texas Attorney General’s office for approval.

Isenhour said a workshop session would be held before the next regular meeting. The landlord of the building currently rented for city offices will present his proposal to the council at that time.

Also last week, the council approved an increase in the bidding process from $25,000 to $50,000. Chapter 252 of the Local Government Code requires that large purchases be awarded via certain competitive bidding or sealed proposal procedures. The Texas Legislature last session increased the minimum amount to $50,000 for projects that must be bid.

The council also adjusted the city’s Capitalization Policy by increasing it from $1,000 to $5,000 per item, in response to recent legislation.

In other business, Mayor Pro Tem Paul Cook reported on a Colorado River Flood Plain Coalition meeting. Cook is the council’s representative on the committee. He said the coalition has updated floodplain maps and benchmarks to better define what areas are in or out of a floodplain.

Cook also said a new FEMA program is available to help determine values of property damaged in a natural disaster such as a flood or hurricane.

Kempner City Council will meet Tuesday at 7 p.m. in council chambers.