This transcript is of a May 6 interview with University of Iowa President Bruce Harreld. It has been edited lightly for clarity.

DI: Obviously, there’s a lot of unknowns right now, one of them being the fall semester. Can you delve into some of the scenarios the university is planning for and whether a virtual fall semester is still a possibility that’s out there?

Harreld: I always start this conversation by asking, rhetorically, if you can predict where this virus is going to go, then tell me and then we can start to figure out what to do next. Since none of us can, I think the simple answer to your question is we are preparing for everything. Our plan of record, as we have said for many weeks, is to be open in August as we normally would with a time rotation of incoming students, orientation for a week, classes begin, etc. All on campus. Having said that, since we don’t know where the virus is, any other scenario you can imagine, including all online, including some hybrid — some online [and] on campus with massive social distancing in classrooms. Protective equipment worn by students, protective equipment worn by faculty, [or] protective equipment worn by both. Testing of CV-19 and the antibodies. All of those are options and I’m not going to rule anything out at this stage. We have a Crisis Incident Management Team that meets every day for two hours made up of all members of the campus community, including some epidemiologists, who are helping us try and anticipate all these scenarios. There is a big planning effort in the middle of it, saying that the plan of record is the deal, but when you start asking, well it might be this or it might be this. The answer is I don’t know [what will happen in the fall] and we’re planning for all scenarios.

RELATED: ‘We’re preparing for everything,’ University of Iowa president says of plans to resume campus operations

DI: As you mentioned last week to the Board of Regents, there’s a $76 million projected budget shortfall through August. Would you consider things like pay cuts for administrations, as some other schools are doing, layoffs or furloughs in construction, or any steps it will take to fill that budget gap?

Harreld: That $76 million is for the academic side of the institution. There is another $79 million at least for the hospital system, because what we have done throughout all of this is first and foremost our guiding principle in our decisions had been to keep people safe, not to keep people safe cheaper. So, we’ve done whatever we needed to do and then we said later we’ll figure out the fiscal damage. That’s where we are now. All of the scenarios will also have fiscal impacts, so yes, to your question. We are also looking at all the natural alternatives. We are going to get a lot of help from the federal government with the CARES Act. We are going to get help from FEMA for protective equipment for the university as well as for the hospital. On the other hand, I don’t think that will even come close to going all the way. So yes, we are looking at freezes, salary reductions, everything. It’s all on the table. It has to be. And that’s also got an element of uncertainty to it. I’m just like all of you. People get frustrated with me because I can’t give them a straight answer. I just don’t know how this thing will unfold. If you’d asked me a few weeks ago when things were starting to get a little bit better, and now I see us spiking a little bit here and there in various parts of the country. How much this impacts us, our students and faculty, I don’t know. I want to tell you this, we will do everything with a first and foremost focus on campus, students, faculty, staff, and safety. Then we’ll have to make the decisions, and if they cause fiscal issues, then we’ll have to go through all the actions you can imagine to remedy those. I will say that I’m spending a lot of time this morning with the deans, and the leaders across campus saying hey, now’s time to actually think about how we want to return. And any costs we will take with the longer-term future in mind. So, let’s not cut those things that actually are critical for the longer term. I’m reminded of a mentor of mine who said in crises, great leaders do two things, they deal with the crisis, and they prepare for the future. Because new opportunities emerge from a situation like this and so I’m trying to, we’re trying to balance both of those at the same time.

DI: You said that there’s also a $70 million impact on the hospitals as well. Is there any kind of pay cuts to doctors that are coming down the pipeline?

Harreld: Everything I just said is also true to the hospital. All the options are on the table. It is slightly different, though. And I think people probably don’t understand the full dynamics here and I’m sure you want to understand, but we have roughly 800 beds in the hospital. Ahead of this crisis when we first start coming in the middle of March, fortunately, people in the hospital have seen pandemics like this. A lot of people have worked on the HIV virus. And they knew that we needed to really use up massive amounts of protective gear. And we might have a huge surge in patients with [COVID-19], and so we went from about 800 beds, down to maybe 500. And we took all of the quote ‘elective surgeries’, out of the system. We just called patients and said, if you need a knee replacement, it won’t be next week, we’re actually going to postpone that because of what’s going on. And we did that across a lot of different types of surgeries and procedures, and fortunately that freed up a lot of beds. That fortunately preserved a lot of protective equipment that all of our health-care workers are running through rapidly, and I can describe why that is. That’s important because you don’t use the same amount in a crisis like this, you use a lot more. And as a result of that, we’ve actually done pretty good. As of this morning [May 6] we had 29 patients in the hospital with [COVID-19]. We had another four patients in the wings that we haven’t gotten the testing back yet for. The peak of that was a couple weeks ago, when it was in the 40s. And so, here we are dropping out 200 or 300 patients per day in the hospital to help us stay at a peak [of] 40, or so. It’s the right thing to do because we preserve the capacity in case we need it as well as [preserving] the equipment. But then the financial tip is enormous. Because all of a sudden, a lot of the surgeons and a lot of the excellent clinicians we have are home because there’s not that much to do. That’s what has created the fiscal issues for the hospital. And so, the question is, as of this Monday, we were allowed to restart the hospital and start working procedures. And sure enough, we have 233 open beds, as of Monday [May 4]. Last night it was 172. You can see refilling the number of empty beds is going down so that’s good. People are coming back. The quicker they come back, the more we will bounce back fiscally. I think we’re anticipating that it won’t bounce back as rapidly, and it may take a little longer for people to be comfortable coming back into a hospital environment, even though it’s probably the safest place to be right now as it relates to the virus. We are considering all the same benefits at the university, because we can do salary reductions. We can do construction braces. It’s all an option.

DI: After 2008, state lawmakers across the country didn’t take funding levels for higher education back up to pre-recession levels. And people are concerned about a similar fiscal impact on higher education funding after this. What do you forsee happening with funding for the UI going forward?

Harreld: The Legislature is not [currently] in session. So, I have no idea. I think you’ve got to be prepared for cuts because the state is taking massive hits. You’re next question is ‘will we recover?’ Well, it didn’t last time, and it didn’t in the last 20 years. So, there’s always a sense that [they’ll] cut us, but don’t worry, in a couple of years [they’ll] get it back and that’s never quite works out that way. I think we have to be prepared for the worst. You’ve got to prepare for the worst and all the alternatives and hope for the best. That’s kind of where we’re at right now. We can’t get tripped up. Last week, somebody tweeted incorrectly what I’d said that you know I’m hopeful that we’ll start football practice June 1 — I didn’t say we will… People wanted to interpret it as a ‘will’. I said ‘no we’re prepared, we’re set.’ I think you guys reported it accurate in your headline. You said ‘we’re set to’ start football back practice June 1. Yes, we’re set. Will it happen? I have no idea. Tell me about the virus. I’ve got no way to — don’t interpret any of that. There’s no record from the state because they aren’t in session. I think they’re planning on coming back in a couple of weeks. I don’t know what timing of that will look like or even what they will consider [when they reconvene]. Whenever they come back, and they ultimately start dealing with these fiscal issues, I haven’t seen a budget estimate for the state of Iowa, but I don’t think you need to be an expert on state of Iowa economics to understand this is probably a link of tax payments and the economy is essentially some degree of a, of a dramatic slowdown in employment. So, I think it’s quite likely that everybody in the state is going to take a pretty big haircut, if you will, and if history is any [representation], higher education will take significant cuts. The future economy is unsafe. To go back to the economic reports that were done in September or October, when we had a report out of the economic studies of the economic impact of the rejection system, we saw, basically, for every dollar that was spent by the state of Iowa, on the regional institutions that there was a substantially higher return, maybe three time for the long term deficit of the state. And that’s what they’re foregoing, but on the other hand we all have to do that when we get into crises. When all of us have a fiscal crisis, we have to stop our short-term spending as well. We just try to do it in a wise way that doesn’t exclude options for the future. And that’s what we’re going to do with the institution.

DI: You’ve talked about the uncertainty of making decisions during this time while there’s so many unknowns. Can you talk a bit more about, personally, what has it been like responding to this whole [pandemic] decisively as the leader of the University of Iowa while still being as uncertain as the rest of us?

Harreld: It’s exhausting and it’s frustrating because I like people, as we all do. And we’re talking to a computer right now and I’m not able to see you, and so the meetings are really strange and bizarre. In some cases, it actually takes less time to get something done than it would in person. Sometimes it takes a lot more. The more nuanced things take more, but to answer your question, I really believe that in times like this, you have to ask yourself what’s the guiding principle, what’s the guiding star? As you’re moving through a situation like this, what are we focused on optimizing? What’s the one thing we have to make sure we get right? And once you get that in your mind, I think a lot of things that, at the least during a crisis, you go through a little bit of shock.

I remember the Wednesday before we went off on spring break. In March, I had a meeting with our deans, and in the meeting, I could see people wrestling with, if we do this, there’s going to be a financial impact or if we do this, it’ll be something. What we’re doing is trying to trade off things, and I kind of pounded on the table to make it very clear that we are going to do a lot of damage to a lot of things across the institution. But the one thing we’re not going to do damage to are the people. We are going to make sure our students are safe, our faculty is safe, and our staff are safe, if we need to go into our homes, we are all going to go into our homes. If we’re going to have to teach online, then we’re going to teach online. And if we have to cancel graduation, we will have a virtual graduation. It’s terrible, but we have to keep people safe.

Once I got fixed on the guiding principle in the middle of March, I will say things didn’t get easier, but they got clearer. I don’t think people come here as students or join our institution as faculty or staff or anything else to put themselves in harm’s way.  And so, once that became very clear in my mind a lot of other things that are easier now and they will get harder on the back end. Because now we have to clean this up and figure it out. Just the virus and the impact it has had on teaching and the impact of having student life and our housing and dining, and on athletics. Even the impact it’s having on the health-care system. I think all those are fixable relatively quickly. If one assumes that the virus, the pandemic, will come to a close, anytime in the next two weeks. And I think that’s possible. So, all of these [impacts] are relatively solvable.

The problem then becomes what happens to the state, and what happens to the state support. That then becomes a second derivative, that’s a much larger issue because if the state takes and appropriates us by a certain amount, given the past, we have to assume it’s never coming back. So, then we have to start figuring out how to rectify themselves, or find new revenue sources, which is really hard to do in an institution like ours.

DI: Since the P3 deal reached financial close in March, you modeled conservatively for the returns on that investment and the endowment, but I was wondering with the current fiscal collapse, what does that mean for the returns we might see on the P3 in the long term?

Harreld: We closed on that transaction on March 10th, amazingly. What timing. That’s all sitting there in cash. We have almost a little less than a billion dollars left in cash. You can go back and look at the market’s crash just a few days after that. And so the market has been down substantially since then. When you have that degree of money and you immediately put it into investments. And the short-term investments have held up pretty well. We’re pretty liquid, that being said we don’t have much of a positive return because we didn’t generate as much money as we anticipated, and we were modeling a relatively modest returns portfolio. Those have all declined, but we haven’t lost a lot of money. Most of the portfolios across the U.S. have actually taken a 10 percent haircut. We are fortunate to have a lot of cash. You can argue that we are smart investors to buy at a low and make some positive returns, but once again you have to tell me what’s going to happen with this virus and when we’ll return to normal economically. So, we’re economically in a good position, and you can argue that we’ve got a real opportunity here to create more wealth for ourselves, but that’s all speculative at this stage.