BY ANDREW FAISON/CONTRIBUTING WRITER
andrew.faison@tidewaternews.com

FRANKLIN—Franklin City Council on Monday voted unanimously to refinance $4.2 million of its debt at a fixed 3.49-percent interest rate.

The old rates ranged from 4.5 to 7 percent on loans to pay for the new gym and classrooms at J.P. King Middle School, a bleacher project at Franklin High school, and improvements to Poplar Spring Cemetery and sewage treatment plant.

The refinancing will not mean a tax increase while allowing the city to borrow $2.6 million for capital improvements that have gone unfunded for the past five years.

Projects include possibly acquiring the former Virginia Department of Transportation building on Pretlow Street for the city’s power and light department, in addition to replacing roofs at the Ruth Camp Campbell Memorial Library, the social services building and other buildings.

Without refinancing the $4.2 million, the city would have had to pay between $1.5 and $1.6 million on its debt for fiscal year 2013, said City Manager Randy Martin.

“That would have been a $400,000 increase from our current fiscal year,” Martin said.

Mayor Raystine Johnson-Ashburn said leveling financial peaks such as that is the single biggest thing the council wants to stress to taxpayers about the refinancing.

“The final maturity is right where it is currently,” said Kyle Laux, vice president for Davenport & Co., the city’s financial advisor. “All this refinancing will do is level everything cash flow wise; you won’t have any spikes from year to year as it is currently.”

The $2.6 million, which will be borrowed at a 2.19 percent interest rate, will be absorbed into the city’s total debt.

“It’s a very nice trade environment,” Laux said. “We hit a nice wave here in terms of timing to be able to do to this.”