FREEPORT — Tim Kelty is out as city manager.

Freeport City Council voted unanimously to terminate Kelty's employment after a closed session during a special meeting Wednesday night. The motion included a provision that council approve a separation agreement to be executed no later than Thursday.

The terms of the separation agreement were not disclosed Wednesday night. Mayor Brooks Bass said it would be made available to The Facts if it filed an open records request, which the newspaper filed Wednesday night following the meeting.

Kelty's position with the city has been in doubt since it was revealed he authorized a $345,000 payment to Covarrubias in July to put toward renting equipment for it to undertake City Hall renovations. City Council awarded the Houston company the $1.085 million contract in April as the low bidder on the work.

Per the contract between the city and Covarrubias, the contractor is responsible for providing a performance and payment bond to the city and is not allowed to do any work on the project until the city sends a notice to proceed to the contractor. Both documents are required before any work can be done or payments can be made under terms of the agreement.

Council voted last week to terminate the contract, and closed-meeting discussions about that termination process were the only other agenda item on Wednesday night's special meeting.

The city now finds itself in the position of facing possible litigation with Covarrubias to get that money back or to have the contractor meet the requirements of the contract so the City Hall renovations can begin.

Kelty had been suspended with pay since Nov. 21. Council appointed Assistant City Manager Lance Petty as interim city manager during that same meeting.