Three of the construction and renovation projects that are part of the Temple 20/20 framework for campus development — the renovation of Pearson and McGonigle halls on North Broad Street; the construction of the Residence, Dining and Retail Complex at the corner of Broad and Cecil B. Moore Avenue; and the Architecture Building on 13th Street — are making good progress. The sight of tall steel frames going up on Broad has some passers-by asking where Temple is finding funds for construction at a time when its Commonwealth appropriation may be cut dramatically. The Temple Times visited with Anthony E. Wagner, Temple's executive vice president for financial affairs, chief financial officer and treasurer, to learn more.

Temple Times: Let's turn the clock back. Why did Temple embark on these big construction and renovation projects to begin with?

Anthony E. Wagner: Everything Temple has done during President Ann Weaver Hart's administration is guided by one principle: careful strategic planning. During the collaborative process that yielded the Academic Strategic Compass and the Temple 20/20 framework — as well as the financial plan needed to realize their visions for the future — we learned that Temple needed to confront two facts: state support for the university is waning, and the cohort of college-bound high-school graduates is declining. We are increasingly a tuition-driven institution, and when it comes to enrollment, we are at capacity. With the number of high-school graduates shrinking, we have to out-compete other institutions for future students and increase our market share just to maintain our current levels of enrollment. To do that, we need to offer future students a great value. That means we can't just sit still and assume that the appeal of Temple's urban location and our improved academic reputation will do all the work. Bottom line: For Temple to be vibrant and strong in 2020, we need to impress future students with the quality of our residence halls, academic and research facilities and recreational space.

TT: How can Temple pull off this construction and renovation at a time when Gov. Tom Corbett has proposed dramatic reductions to Temple's annual state appropriation?

AEW: There are four pots of money that the university is drawing upon to support the Temple 20/20 construction and renovations projects. The Commonwealth provides an annual capital appropriation of $40 million that may only be used for bricks and mortar projects. We also rely on gifts from donors — that's one of the sources of funding for the Pearson and McGonigle renovation, for example. We borrow funds by going to the capital markets and selling bonds to investors — the last time we did that in 2010, we borrowed $200 million at a fixed interest rate of 3.9 percent over thirty years. And we can also use university reserves. The reserves come from our operating margin, which is in the 3-4 percent range. Having these reserves is very important. In addition to helping us fund projects, the presence of healthy, growing reserves improves our ability to borrow money at lower rates.

TT: You said a Commonwealth capital appropriation of $40 million is one of the four pots of money used to fund construction and renovation. Is that different from the Commonwealth appropriation that Gov. Corbett recently proposed reducing?

AEW: Yes. One of the sources for the Temple 20/20 construction and renovation is the capital funding. That's different from the university's operating appropriation. They're separate. The good news — and we should give the Corbett administration credit for this — is that they're telling us the capital fund is likely to continue.

TT: You made the argument that attracting future Temple students with the help of these new facilities is critical to the university's future. Will the new projects on Broad Street benefit the community as well?

AEW: Without question. A hallmark of the 20/20 framework was to incorporate retail, commercial and services into the ground floor of all of our development on Broad Street — our most public space — to service our student population and the surrounding community. But it goes deeper than that. More Temple graduates decide to stay in the region than any other local institution. So by attracting more future students to come to Temple, these future facilities are helping to fight brain drain. They're going to keep more educated people in the region, and that's good for the local economy.

TT: What do you say to people who argue that Temple just shouldn't be spending money on these kinds of projects at this time?

AEW: Even though Temple is reducing its operating budget so that we don't have to place the full burden of the state budget cuts on our students, it would be irresponsible for us not to pursue long-term investments in our future that are necessary to keep demand strong. These are not mutually exclusive ideas. At a time when many public universities around the country are very uncertain about their path forward, Temple University is among a minority of institutions that has done the strategic planning and as a result, we own our destiny. We're not waiting for the cavalry to arrive. They aren't coming, and we've got a plan for how to deal with it.