The Hakodate District Court on Monday ordered Mayor Hiroshi Inoue to return some 300,000 yen to the city coffers that was spent illegally by members of the assembly.
The ruling comes in response to a lawsuit filed by a citizens' ombudsman group in February 2003, claiming that assembly members had spent some 1.24 million yen earmarked as "political investigation funds" for purposes that were not linked to political activities.
Presiding Judge Masamichi Okubo ruled that some of the items the money was used for could not be considered politically significant.
"Items such as the purchase of educational materials to study English conversation do not have strong ties to the administration of the city, and clearly lack rationality as an expenditure to be covered by political investigation funds," the judge said.