1. Choose a card.
The player who holds the Free city card in their hand takes the first card of the draw pile and adds it to their hand.
That player will then pick two cards from their hand, FIRST one for their own city and THEN one for the Free city.
Each player then places the remaining cards on their side of the Border card.
Clarification: The Free city can not discard a card to get 3 coins, unless it CAN NOT play a card (construction or wonder building).