Measure N: Watsonville Community Hospital’s $116 million bond passes

Tuesday, March 19, 5:30 p.m. — Measure N, Watsonville Community Hospital’s $116 million bond, passed on Tuesday, after the release of results from Santa Cruz County.

Tony Nuñez, the Pajaro Valley Health Care District board chair, said he was grateful for effort of the volunteers on their campaign team.

“I’m extremely proud and excited about what the future holds for the hospital and the healthcare district,” he said.

A combined total of 68.2% voters in both Santa Cruz and Monterey counties supported the measure, more than the two-thirds of the vote needed for it to pass.

In Santa Cruz County, 68.5% of voters said yes to Measure N, with a turnout rate of 34.7% As of last Friday, March 15, 706 Monterey County voters, or 64.4%, had supported the hospital bond. Turnout in that part of the district was just 25.6%.

“There’s a lot of things to figure out over the next six months or so, about how we’re going to spend this,” said Nuñez. “But the first thing we’ll do is set up an oversight committee.”

Friday, March 15, 5:12 p.m. — Measure N, Watsonville Community Hospital’s $116 million bond, continued to inch toward a narrow victory after Santa Cruz and Monterey counties updated their ballot counts on Friday afternoon.

The percentage of voters who support the measure in the Pajaro Valley Health Care District, which includes parts of both Santa Cruz and Monterey counties, remained steady at a combined 68.19%, with 15,450 votes counted.

In Monterey County, 706 voters have supported the bond measure through Friday’s update, or 64.42% of the 1,096 ballots counted to date.

In Santa Cruz County, Measure N had the support of 68.48% of voters, or 9,830 votes as of Friday afternoon. Another 4,524 voters (31.52%) were opposed. 

The measure requires support from two-thirds of votes, or 66.67%, to pass. 

Turnout has been low across the district, but higher so far in Santa Cruz County, where 34.40% of eligible voters have had their ballots counted. In Monterey County, turnout was 25.35%. Both counties are planning to update their vote counts again Friday.

Previous updates

Monday, March 11, 4:22 p.m. — Watsonville Community Hospital’s $116 million bond, Measure N, kept its narrow lead with Monday afternoon’s new election results. 

Voters in the Pajaro Valley Health Care District, which includes parts of both Santa Cruz and Monterey counties, had backed the measure by a combined 68.2%, with 14,344 votes counted. 

Pajaro Valley Health Care District board member Tony Nuñez said he remains “cautiously optimistic” and thinks the remaining ballots will continue to be about 70% in support of the measure.

“It speaks volumes to a lot of people’s trust in the health care district,” he said. “And not only that, but I think about people’s want and need for this community to have a strong and robust health care provider, and I think people are hopeful about that.”

Monterey County most recently updated its vote totals Friday and won’t have new results until Wednesday. The measure requires support from two-thirds of votes, or 66.67%, to pass. 

Measure N had the support of 68.47% of Santa Cruz County voters, or 9,384 votes. Another 4,321 voters (31.53%) were opposed. 

In Monterey County, election officials had tallied 668 out of 4,486 possible ballots as of Friday, with 63.22% of voters in favor of the measure

Friday, March 8, 4 p.m. — Measure N, Watsonville Community Hospital’s $116 million bond, retained its lead after Friday afternoon’s latest election results update.

Voters in the Pajaro Valley Health Care District, which includes parts of both Santa Cruz and Monterey counties, had backed the measure by a combined 68.31%, with 12,435 votes counted. 

Measure N had the support of 68.59% of Santa Cruz County voters, or 8,091 votes. Another 3,705 voters (31.41%) were opposed. 

In Monterey County, election officials had tallied 668 out of 4,486 possible ballots as of Friday, with 63.22% of voters in favor of the measure. The measure requires support from two-thirds of votes, or 66.67%, to pass. 

Hospital spokesperson Nancy Gere said she’s happy the support is continuing to trend in their direction. 

“It’s encouraging, with more of the votes in,” she said. “We’ll get more [results] on Monday.”

Wednesday, March 6, 2 a.m. – In Tuesday night’s final vote tally, Measure N had 8,822 votes counted for Watsonville Community Hospital’s $116 million bond. Of those, 5,782 (or 68.58%) were in support of the bond and 2,649 (31.42%) were opposed.

The district also includes a portion of Monterey County. Election officials there had tallied 473 out of 4,486 possible votes as of Wednesday, with 65.58% of ballots in favor of the measure, bringing the combined approval rate down slightly to 68.15%. The measure requires support from two-thirds of votes, or 66.67%, to pass.

Hospital leaders say the bond money will go a long way to improving the facility’s long-term financial prospects. Officials plan to use the funds to purchase the land the hospital sits on from its Alabama-based owners, redirecting the $3 million in annual rent payments toward hospital services. 

The money would also go toward doubling the size of the emergency room, replacing outdated equipment, such as a CT scanner, and updating the hospital’s old plumbing and heating, ventilating, and air conditioning systems, which haven’t been upgraded since the building was constructed 26 years ago. 

In its second year of public ownership, Watsonville Community Hospital has already made significant strides toward financial stability since emerging from bankruptcy thanks to a $64 million fundraising effort and the creation of a new health care district. It has wiped away $16 million in operating losses with no layoffs and hired a new CEO, Stephen Gray, the former chief administrative officer at Sutter Bay Medical Foundation – Santa Cruz Division. 

But its future is far from certain. The 106-bed hospital that the community inherited in 2022 was a financial mess. For more than two decades, it struggled under changing, for-profit owners and a revolving door of 20 different CEOs. For fiscal years 2021 and 2022, the facility recorded more than $20 million in annual losses. Both the hospital and its previous owners, Los Angeles-based Halsen Healthcare, filed for Chapter 11 bankruptcy in December 2021.

Last August, the state determined that Watsonville Community Hospital was in such dire straits that it required a no-interest loan of more than $8 million to stay afloat. The hospital was still losing millions a year, administrators said they sometimes struggled to make payroll.

The hospital’s bankruptcy trustee sued the facility’s previous owners late last year, alleging the former executives siphoned millions from the hospital’s finances for personal use. 

Adding new services and equipment could help bring in more revenue for a hospital whose population base of 117,575 stretches from Pajaro in Monterey County to just north of Rio Del Mar. The Pajaro Valley Health Care District encompasses some of the lowest-income neighborhoods of Santa Cruz County and northern Monterey County, with many seniors and those on fixed incomes. It is made up predominantly of patients covered under government programs that typically pay far less than private insurance plans.

Community leaders had worried about whether they would be able to convince enough voters to turn out to support the measure in an election with no other South County races on the ballot.

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