The Denver City Council approved an ordinance Monday that will enact a plan to release $113.8 million in reserved debt funds to go toward improvement projects at Denver International Airport.

The council unanimously approved the ordinance without comment, with council members Debbie Ortega and Amanda Sandoval absent. According to officials, the $113.8 million will now be released to DIA by early July.

The funds are currently tied up in DIA’s Bond Reserve Fund, a legally required contingency to cover payments on revenue bonds when the airport’s income is disrupted.

“We have this unique opportunity to release cash that is currently sitting idle in the debt service reserve fund that’s not legally required,” said Lupe Gutierrez with the Department of Finance during a committee meeting. “It will help further the growth of the airport by reinvesting in those capital needs.”

Gutierrez said the airport has never used the Bond Reserve Fund, even during the COVID-19 pandemic when the airport’s traffic and income plummeted for several months straight.

Throughout the pandemic, the airport relied on furloughs, service contract cuts, hiring freezes and federal relief funds, without even considering dipping into the Bond Reserve Fund, she said.

Because of this, the airport wants to instead spend the money on remaining projects from its 2018-2022 capital improvement program, so it won’t need to issue new money bonds for the projects. The specific projects that will be funded are not yet known.

“We’ve never even approached having to touch the reserve funds,” said Councilman Kevin Flynn during a committee meeting. “This does seem like a prudent move.”

To access the $113.8 million, the airport must change the way it determines its Bond Reserve Fund. Currently, the fund is set at the airport’s maximum annual debt service; however, in 2018, the council passed an amendment allowing the fund to be 125% of average annual debt service.

Switching from maximum annual debt service to 125% of average annual debt service would lower DIA’s Bond Reserve Fund from the current $261.7 million to $147.9 million – a decrease of $113.8 million.

However, under the amendment, to make the switch, there cannot be any outstanding DIA bonds that were issued before Aug. 1, 2000.

The ordinance approved by the council Monday will allow the airport to refund $29 million of DIA bonds that were issued in 1992. The bond holder, Bank of America, has agreed to the refund in exchange for 2021 bonds, Gutierrez said.