FAIRHOPE, Ala. - The Financial Advisory Committee voted Monday to recommend that Fairhope use Frazer Lanier Co. of Montgomery to refinance the city’s utility and general fund bonds, which would include borrowing approximately $8.6 million for water and sewer projects and obtaining a line of credit for road paving projects.

Current interest rates are driving the refinancing plan, which would save on current indebtedness, but the borrowing would add to debt service.

“It would add $600,000 a year to water and sewer debt service,” Treasurer Nancy Wilson said at the July 25 meeting. “It’s a question of looking at our needs and how quickly we want to address those needs.”

Utility rates could increase as a result of the proposal, she said.

In October, the council authorized the Frazer Lanier investment banking company to study a refinancing of the city’s bonds during a time when interest rates were favorable. That opportunity passed but favorable rates are again possible, the FAC chairman said.

Councilwoman Debbie Quinn was the only committee member to vote against using Frazer Lanier, arguing the city should request proposals from several firms.

“I just think that there’s competition out there, and we ought to let competition give us the best deal,” Quinn said.

Mayor Tim Kant said that when Frazer Lanier presents its refinancing plan, it will include comparison rates, and the council can reject the firm’s proposal at that time, if it chooses to do so.

During the July 25 meeting, Councilman Mike Ford confirmed with staff that the total increase in debt service for the refinancing of the utility and general fund bonds, with the additional borrowing, would be approximately $1 million a year.

The City Council is expected to take up the recommendation at its Aug. 8 meeting.

In other business, the FAC:

• Heard a report about Monday’s budget committee meeting with department heads.