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I REMEMBER quietly scoffing in February 2014, as an attorney argued that the City of Portland was allowed to spend money from its water and sewer ratepayers on financing city elections.

“There is nothing more connected to the operation of the sewer system than who sits on the city council,” Deputy City Attorney Terry Thatcher told Multnomah County Circuit Judge Stephen Bushong, a little more than two years into a lawsuit over how Portland spends its utility funds.

Someone in the audience groaned. Bushong shot back: “Then what’s the limitation?”

That was always the central question in the lawsuit over the city’s water and sewer spending, filed in 2011 and almost certainly nearing a close with a Portland City Council vote on Wednesday, December 20.

Portland’s City Charter says money from utility ratepayers must go back into the water and sewer systems—not into any old thing council feels like paying for. The plaintiffs in the case, including a former city commissioner, argued the city had lost its way. The city has maintained it has wide latitude when deciding how to spend the money.

Another scoff-worthy claim: Thatcher also argued in 2014 that money from the city’s Water Fund could be spent to build Portland Loos—street toilets— because “we chose to furnish water to the citizens with this device.”

Bushong didn’t buy it. Nor did he feel that water money should be spent financing elections or on a number of other items the lawsuit raised. By the time each of the disputed expenditures had been litigated, the judge found the city had misspent some $17 million of its water and sewer money on unrelated items. (He found millions of other expenses were legitimate.)

Portland officials disagreed with his rationale, but rather than tying up the matter in the appeals process, City Council is on the verge of paying back a portion of that cash.

In a $10 million settlement the council will consider, the city will pay high-profile plaintiffs’ attorney John DiLorenzo and his team a cool $3 million before the end of the year. Then the council will find $7 million in its general fund by October 2019 to put back into its utility funds.

“While the City continues to respectfully disagree with some of the court’s rulings in this matter, I am satisfied that this settlement is fair and equitable to the City and its ratepayers,” City Attorney Tracy Reeve said in a statement announcing the settlement.

The settlement probably makes things tighter as Portland’s spending rises faster than its record revenues. Later this week, the city will get its clearest picture yet of the budget outlook in the year to come. If this year’s trend stands, there will be millions to play with on a “one-time” basis, but also pressing recurring costs that need long-term funding. And with the settlement, the City Council might find itself without $10 million it could have put toward much-needed services.

But maybe it’s worth it, if only to preclude the type of arguments the city made in 2014.

“The real value to the lawsuit is at least the current council will be pretty cautious that expenditures truly relate to water and sewer services,” DiLorenzo told me last week. But he noted: “What if the council a couple years from now decides they’re going to build a park and they want to use water and sewer funds for it? There’s nothing that would stop them.”