WATSONVILLE, CA, Oct. 29, 2026 — The Watsonville Community Hospital Board of Directors voted Wednesday to advance a plan to secure new funding, strengthen hospital operations, and preserve essential healthcare services. The Board also authorized the start of a required 120-day public notice process for the potential closure of Labor and Delivery and Neonatal Intensive Care Unit (NICU) services, though the Board did not vote to close these services.
“This community fought hard to save Watsonville Community Hospital in 2022, and the work to secure its future continues today,” said Tim Moran, Interim Chief Executive Officer. “We are pursuing every reasonable opportunity to preserve services, including new funding, stronger partnerships, and changes to improve our financial health. But we must also prepare for the possibility that funding will not arrive in time. Every step we are taking is focused on one goal: keep Watsonville Community Hospital open and serving our community for generations to come.”
The Board authorized an application for up to $26 million through California’s Distressed Hospital Grant Program. The funding could help stabilize maternity and NICU services while supporting physician recruitment, improved technology, and long-term financial planning. Hospital leadership has also requested financial support from Kaiser Permanente and the California Nurses Association to preserve maternity services.
The hospital currently has approximately eight days of cash reserves available and faces a daily cash shortfall of about $85,000 before supplemental government payments. Maternity and NICU services are projected to lose $9.6 million in fiscal year 2026. Upcoming federal changes to Medi-Cal are expected to add further financial pressure.
Under the Board’s action, no closure of services can occur before the required 120-day notice period ends. With formal notice to be given on Oct. 29, 2026, any potential closure would be no earlier than 120 days from that date.
During the 120-day period, the hospital will continue seeking funding and partnerships, will hold a public hearing, and work with employees, patients and community members to explore alternatives. The hospital will also continue planning with Salud Para La Gente, Dominican Hospital, the Central California Alliance for Health and other regional partners to ensure continuity of care for patients and families should service changes become necessary. Any decision to close services would require another Board vote.
“Preparing for a difficult choice does not mean we have stopped fighting to avoid it,” Board Chair Tony Nuñez said. “We saved our hospital before. Working together with passion and creativity, we can give it a stronger future.”
More information is available at www.pvhcd.org.
About the Pajaro Valley Health Care District
The Pajaro Valley Health Care District is a public healthcare district formed to ensure continued access to high-quality, equitable healthcare for the Pajaro Valley community. Established in 2022 to help preserve and strengthen local hospital services, the District oversees Watsonville Community Hospital and is governed by a publicly elected five-member board committed to supporting sustainable operations, expanding access to care, and improving community health outcomes. For more information, pvhcd.org.
About Watsonville Community Hospital
Watsonville Community Hospital is a public, non-profit community healthcare provider; a 106-bed acute care facility serving Watsonville and the surrounding culturally diverse tri-county area along California’s Central Coast. The hospital offers a wide range of quality medical and surgical services including cardiac care, diagnostic imaging, emergency services, maternity services, orthopedics, pediatrics, rehabilitation services, robotic surgery, urology, vascular surgery, women’s health services, and wound care. With 650 employees and more than 300 physicians, the hospital strives to exceed patient expectations, deliver the highest quality care, and be a place of healing, caring and connection for patients and families in the community we call home.
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