The Board of Regents, State of Iowa, held a virtual meeting on April 30, 2020. President Harreld provided an update on the loss of revenue and increased expenses related to COVID-19. His remarks as prepared are below.


President Richards, President Pro Tem Cownie, and members of the Board of Regents.

Thank you.

Thank you for your support, guidance, and commitment to all of us over the past 60 days, 60 days that have been unprecedented in the history of our campus, state, nation, and world.

I would also like to take this time to publicly thank all of those who have spent the past 60 days working tirelessly on the front lines including our health care providers, the State Hygienic Lab, our facilities management staff, laundry, public safety, Cambus drivers, dining staff, and especially our Critical Incident Management Team.

Over the last two months, the university has taken deliberate steps to protect our students, faculty, and staff, as well as our surrounding community.

Our strategy of doing things right, not fast, is what allowed us in 60 days to cancel study abroad programs; repatriate students, faculty, and staff; move completely to virtual instruction; shift to work-from-home status; close our residence hall system; mothball research; cancel elective health procedures; and stand up new supply chains for the university and the state.

The university will employ the same strategy of right, not fast, as we consider a gradual, purposeful, and safe resumption of daily activities on our campus.

Our campus is ready to respond because of the support we have received from the governor, the general assembly, and the taxpayers of our state. Our public higher education system, and subsequently our students, is the envy of every nation across the globe because of this partnership. We will need this partnership as we move forward to resume day to day activities.

As I have said many times, without strong, predictable financial commitment from our state, it is difficult for us to maintain the excellence you and Iowans expect. In times like this, that state support becomes even more vital in order for us deliver on our mission for the state.

At the outset of the crisis, our campus acted in a way that was led by our values and we focused on doing what was safe. In so doing, we created several financial challenges we must now address. Fortunately, as each of you know, the federal government, through the CARES Act, has provided resources to the university and to our students to offset a fraction of these fiscal issues. These resources, $8 million for our students and $8 million for the university, are deeply appreciated but represent only 10.49% of our losses.

As an example, our residence hall system, a self-supported and bonded enterprise, provided refunds to our students, which was the absolute right thing to do. But actions have financial ramifications, and that single action cost $16,055,000.

Myriad services across campus provided refunds or lost revenue including:

  • Study abroad
  • The Iowa Memorial Union
  • Recreational Services
  • Parking and Transportation
  • Dental, hearing and educational clinics
  • And not to mention athletics.

Since March and projected through August, the university, not including UI Hospitals Clinics, will lose a little more than $76 million.

Our hospital, it goes without saying, has been on the frontline of this pandemic and its steady approach to the crisis has been impressive.

However, their quick actions, which were in step with Governor Reynolds’ orders, has had a significant impact upon the finances of UIHC and our dental clinics. These actions, such as purchasing additional personal protective equipment (PPE), dramatic testing, preparing our physical plant for a surge, and suspension of elective surgeries, were taken with eyes wide open knowing the fiscal impact.

I would like to expand upon the term "elective surgery” for a brief moment, as much of the health care that we needed to delay would not be deemed elective to lay individuals and certainly not to our many of patients. Technically speaking, any surgery that is scheduled is considered to be elective. Paraphrasing our CEOs comments, … it is important to note that UIHC does not perform many cases that are cosmetic, so when Iowans come to the university, it's because it's something serious. Canceling many of these surgeries has had a very disruptive impact on the lives of many patients.

Net, the actions taken by UIHC and our dental clinics have resulted in over $70 million of losses and expenses over the past month alone.

While we are moving towards reopening, in step with Governor Reynolds’ order, it is important to note that UIHC and our dental clinics will continue to have mounting expenses and losses each and every month for the next several months.

So, what are the next steps?

As you know, our budget process empowers our colleges and central service units to determine their yearly budgets based upon their projected revenue. Each college is now working to understand the potential changes in enrollment and will model its expense envelope under different scenarios for tuition and state appropriations. So, once tuition and state support are finalized, we will be able to execute rapidly.

Over the past four years, the UI has used its strategic plan to frame its investments to meaningfully improve the long-term quality of the UI. This work has been guided by the following principles:

  • Placing people first as our university is only as strong as our students, faculty, and staff;
  • Preserving and building on core values of excellence, learning, community, diversity, integrity, respect, and responsibility;
  • Delivering world-class education, research, and health care; and
  • Engaging shared governance and campus leadership.

Utilizing these principles, leadership of colleges and central service units is now charged with repairing the fiscal damage caused by this pandemic.

Finally, the university, in conjunction with shared governance and campus leadership, is also exploring several campus-wide actions to reduce operating expenses and improve cashflows. Simply put, everything is on the table.

Next, you should know that we are not just grappling with our current fiscal issues. Strong organizations do not let the urgency of the current situation distract them from delivering on their long-term goals. To that end, while we are modeling various fiscal alternatives, we are also intently exploring how to safely resume daily activities in preparation for face-to-face education on Aug. 24. To facilitate this work, we have created a structure that has allowed us to manage the current crisis while simultaneously planning for the future. These planning teams are embedded in our Critical Incident Management Team and are creating operational scenarios and guidance that will be used by the campus in order to reopen safely and deliberately. These teams are led by experts and are focused on areas such as:

  • Health and safety procedures
  • Classroom sizing and scheduling
  • IT support
  • HR policies
  • Facilities maintenance
  • Finance/budget, and
  • Research

For example, our Health and Safety Work Group is led by the dean of the College of Public Health, Edith Parker. This group is exploring campus guidance that will cover:

  • Procedures for social distancing in classrooms; housing; dining, etc.
  • PPE practices/requirements, including who would wear what, how much PPE we would need, and preparing needed stockpiles
  • Testing, contact tracing, isolation, sero-positivity, etc.
  • How we protect our most vulnerable populations, and
  • Ensuring coordination and compliance with local and state public health departments

These are challenging times and, simply put, there is no easy answer, and so we must explore, test, and implement many solutions. Yet there is one thing I am certain of, which is that together, and with support from our board and our state, our university will be here for the next generation of Iowans and beyond.

On a personal note, I remain honored and humbled to lead an institution that provides world-class education to over 32,000 students, employs nearly 25,000 Iowans, drives a significant portion of Iowa’s gross domestic product, and provides tens of thousands of Iowans critical health care every single year.

This is an immense responsibility, which is only magnified during times of crisis — as we now find ourselves in. We, as leaders, have a responsibility to the institution and those it serves, to ensure it not only survives this crisis, but thrives for many generations to come. How we, as leaders, manage this crisis will define our legacy.