Overview
- Stephen Gray announced he will leave his post as CEO effective July 10, citing personal reasons after more than two and a half years leading the community-owned hospital.
- The Pajaro Valley Health Care District board has begun selecting an interim CEO to start in July and plans a permanent CEO search in fall 2026 with a likely full-time hire by November.
- Gray led the hospital since November 2023 and oversaw the first strategic plan under public ownership, the Measure N bond implementation, and the launch of on-campus primary care services.
- Watsonville moved from large losses in 2025 to positive operating results this year and secured roughly $10–10.6 million from California’s Distressed Hospital Loan Program to cover debt, current salaries and supplies.
- Staff say morale is strained after funding disruptions that left about $16 million withheld last year, but leaders point to rising quality and patient-safety ratings and say leadership stability will be key to sustaining service and staffing gains.