27 



A Comoiiimem to Alaskans 



Urt>an Strategy 



Objective 2 Capitalize the State Construction Loan Program. 



For the next six years, the Depamnent plans to request an appropriation to the State 

 Construction Loan Program as pan of its capital budget submission. Due to the large 

 demand for financial assistance from this loan program Oast year alone, community 

 requests exceeded $95 million), a minimum capitalization of $ 1 million per year for six 

 years is recommended. At this level, over $177.7 million in sanitation projects could be 

 financed over twenty years. 



If revenues are available, a more aggressive six year capitalization commitment is 

 recommended. 



AN ENDOWMENT FOR THE FUTURE, 



The graph below compares the value of new projects which could be financed through the 

 State Construction Loan Program over a twenty year period under four capitalization 

 scenarios, where $10, $15, $20 and $25 million are appropriated each year for six years. 



$444,159,125 

 S355.327.300 

 S266.495.475 

 $177,663,650 



'«^>rt<or->aD9kO—r>«f^,^' 



« r*o oe ot 



a 



Fiscal Ye 



Under Scenario 1 , the State capitalizes the fund at the rate of $10 million per year for six 

 years. This commitment level would allow the fund to finance $177,663,650 worth of 

 projects over a twenty year period. 



As the capitalization level increases under the remaining three scenarios, the number of 

 projects that can be fiinded over a twenty years and the average return to the revolving 

 fund increase proponionately. Under each scenario the State would realize more that a 

 225 percent return on its initial investment after 20 years. 



