MARIETTA - Mayor Bill Dunaway got his wish in a rare special called 8 a.m. meeting Friday when the City Council approved a complicated financial proposal to restructure the bond debt on the city-owned Hilton Atlanta/Marietta Hotel & Conference Center.

The council voted 5-2, with Grif Chalfant and Van Pearlberg opposing, to approve the financing deal, which authorizes staff to retire the $29.3 million in variable rate bonds left over on the Hilton and issue $31 million in new tax exempt fixed rate bonds. The new bonds will have a face value of $31 million, with the market expected to pay a premium on them, for a total cost of about $33 million - provided the rates remain the same as last month, said Sam Lady, the city's chief financial officer.

"It makes tremendous economic sense to do it," Councilman Philip Goldstein said.

"It's a good benefit to the city to refinance that. I put it to it's similar to where if your interest rate on your house is a variable rate and it's a higher rate and you can get a lower fixed rate - it is just prudent basic finance to go with a lower, fixed rate," he said.

Since 1996, the city has had variable rate bonds that funded construction of the 200-room hotel and conference center, which the city leased to Dallas-based Remington Hospitality until 2028. Until recently, the variable rate bonds have stayed within the anticipated range. But with the current economic downturn, the variable rate bond market increased causing the city's bond payments to rise above the lease payments being received by the city from Remington. To prevent the city from taking a loss, but without the knowledge of some council members, last fall Lady brought the bonds back into the city using unrestricted cash that was invested in CDs.

The city's bond underwriter, Gordon Mortin, of Morgan Keegan, with the encouragement of Dunaway, presented the financing proposal to the council on Sept. 3 and on Sept. 9, the council voted it down in a 4-3 vote, with Goldstein, Jim King and Annette Lewis opposing.

At the recommendation of Chalfant, a blue ribbon citizens committee of leading businessman was formed to examine the proposal. The committee ended up endorsing the deal, but advised the council to get opinions from an independent bond adviser and independent bond attorney before they voted on it - instead of solely relying on the opinions of Mortin and the city's bond counsel Earle Taylor of McKenna, Long & Aldridge, who stand to earn a bond issuance fee of $300,000.

The council agreed to the committee's advice and hired independent bond counsel Matthew Nichols of Atlanta-based Sutherland, Asbill & Brennan, and independent financial adviser, Dianne McNabb, director of Public Financial Management Inc. This week, they issued opinions advising the proposal was both legal and recommended.

Nichols charged the city $10,000 for his opinion, while McNabb will charge $15,000 for the opinion and other services.

"She's acting as the city's independent financial advisor on this transaction until bond's placed," City Manager Bill Bruton said.

Chalfant and Pearlberg voted against the proposal Friday because they wanted to give the public a few days to weigh in on those independent opinions before voting.

"I really don't think the Mayor understands, it's not just the bond refinancing, per se, it's the process - giving your citizens the right to see what is transpiring during the process and finally giving them a platform in which to voice their opinion before a vote is taken by the council," Chalfant said after the meeting.

Chalfant said Dunaway should put the reports from the financial and legal advisor, as well as the citizen committee report, on the city's Web site.

"Then let the citizens of Marietta speak before the council meeting," Chalfant said.

Chalfant wants things to be handled differently in the future.

"If there should be any issue to come before the council in the future, especially any complicated financial matter, whether related to a bond issue or not, said issue should be explained in writing to the council members. There should be enough time before a required vote to study and ask questions of staff," Chalfant said.

Moreover, a future bond issue should be structured with the advice of a bond advisor whose firm will not be involved in the underwriting. The city needs to have a bond advisor, like McNabb, who will answer questions impendent of the underwriter, Chalfant said.

Councilwoman Holly Walquist said after receiving the green light from the citizens committee, McNabb, and Nichols, she was satisfied with the proposal.

"All were favorable for us to move forward, and that's what I was looking for, were other opinions besides what we had. And that's why I felt we were ready to move on," Walquist said.

The Downtown Marietta Development Authority is the body that issues bonds for the city. The DMDA is expected to meet Tuesday to vote on issuing the $31 million in new bonds.

"I think we have a council that has spent a lot of time on bonds now, and is very educated and will be able to look at bonds in the future and have a lot more background, which will be very positive as we move forward," Bruton said after the meeting.

"I think that we've got citizens that have participated in the process that have added value to what we've done and have lent credibility to the proposal that finally ended up getting passed, and made good suggestions on the process. And those suggestions on the process have already been implemented and I think will continue to be implemented and used in the future," Bruton said.