The Seattle City Council voted Monday to use the $45 million settlement the city received for dropping its bid to keep the former SuperSonics basketball team in town to pay off bonds that had been issued for the team’s arena.

The SuperSonics moved to Oklahoma City this year, accepting the settlement in order to end litigation over the team’s lease at city-owned KeyArena.

The council’s action adopts recommendations offered by finance director Dwight Dively in September. He suggested using about $34 million to defease city general obligation bonds that had been issued for past KeyArena projects. He also recommended using $2.8 million to pay the city’s legal bills for the litigation, and about $6 million for capital improvement projects at the KeyArena and surrounding Seattle Center.

The City Council’s action, by a unanimous vote Monday, authorizes Seattle to defease Series 2002B, Series 2003, and Series 2005 limited-tax improvement and refunding GO bonds.

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