At a tense board meeting Jan. 25, the San Benito Health Care District board voted to appoint Mary Casillas to the permanent CEO position of Hazel Hawkins Memorial Hospital, with a contract that increases her salary by more than 45 percent.
Area residents, hospital nurses—and even a local official—urged the board to not approve Casillas’s new $450,000 annual contract. Despite heated public comments from meeting attendees lambasting the board, it proceeded to approve the contract in a 3-1 vote.
Casillas’s contract extends until 2027, with automatic yearly renewals pending her performance evaluation to determine if there should be a salary adjustment. It does not, however, give the option to evaluate her contract on a yearly basis.
Currently, Casillas’s compensation as interim CEO—a position she has held since 2022—is $310,000. As the hospital’s new, permanent CEO she will be making just over 45% more per year.
The move comes as HHMH is embroiled in a Chapter 9 bankruptcy case and is actively seeking out a potential buyout from interested parties to take over the hospital.
In November 2022, Casillas was appointed as interim CEO after former CEO Steve Hannah stepped down in October of that year. Within weeks of her appointment, HHMH declared a fiscal emergency, leading to the Chapter 9 bankruptcy filing in the U.S. Bankruptcy Court in May 2023.
Hospital nurses represented by the California Nurses Association (CNA) spoke out during the Jan. 25 meeting saying that it was outrageous to give Casillas a raise when the hospital is in bankruptcy proceedings.
Sonia Duran, a nurse at HHMH and CNA representative, choked up with emotion as she addressed the board.
“It’s just a slap in the face. We’ve had so many cuts [to services], everything is frozen; everything is crappy; everybody’s leaving,” Duran said. “We lost so many good people.”
Other attendees claimed that Casillas had not engaged with concerned residents over the future of the hospital, with one resident saying there was an “animosity” between the hospital administration and the public.
Around 40 people packed the meeting room, including San Benito County District 1 Supervisor Dom Zanger, who was there to voice concerns over Casillas’s salary raise.
“If Mary Casillas applied for this position in a different hospital, right now with her current qualifications, would she be offered this? I highly doubt it,” said Zanger, who added he was speaking on behalf of his constituents.
Zanger compared Casillas, who has served as the Hollister hospital’s interim CEO for just over one year, to recently-appointed Watsonville Community Hospital CEO Stephen Gray. Gray was offered a $475,000 base salary and has more than a decade of administrative and executive experience in healthcare.
“So I have to say, no, the money’s probably not justified,” Zanger said.
Supporters of Casillas also spoke during the Jan. 25 meeting, saying that as interim CEO she came into a bad situation and has risen up to the occasion.
A statement of support for Casillas’s appointment was read at the meeting on behalf of Dr. Michael Bogey, emergency physician and chief medical officer for HHMH.
“She steered throughout turbulent financial times and has brought us from a financial crisis onto a more firm ground,” the statement said. “Her work ethic is excellent.”
Frankie Gallagher, director of marketing and community relations for HHMH, said that Casillas has been successful at ridding the hospital of “toxicity”, and that she is being scapegoated unfairly.
“The notion that Mary is the ‘bad guy’… she’s not. She’s done a phenomenal job of creating a welcoming culture and fostering empowerment and improvement in all of us,” Gallagher said.
Before the district board made its final decision, board member Devon Pack said his support for Casillas in the CEO role was “conditional,” citing the fraught relationship between the hospital administration and the community at-large
“If there is not improvement in our labor relations; if there’s not improvement in our relations with the community of San Benito, our relations with local government agencies…if I do not see that improvement I will not be supporting you when we are considering the renewal or extension of this contract,” Pack said.
Pack then moved for the board to amend the proposed contract before voting on it to add a yearly evaluation for Casillas and give the board power to terminate the contract.
SBHCD legal counsel Heidi A. Quinn advised Pack that his request was outside of the scope of a public meeting and should have been addressed prior to finalizing the contract terms. The board then approved the contract in a 3-1 vote, with Pack being the sole dissenting vote.
After the vote, Kelly Staley, an HHMH nurse represented by CNA, said she was dismayed by the decision and that giving the CEO a raise when the nurses’ contracts have been undermined is a bad move. But she was surprised and felt good that Pack voted against Casillas’s appointment.
“It felt really good to feel like somebody has heard our side,” Staley said. “So his standing up was like us standing up.”
The San Benito Health Care District on Jan. 26 released a statement about the official appointment of Casillas.
“Mary’s dedication and leadership during these extremely volatile times has been nothing short of extraordinary,” said SBHCD board president Jeri Hernandez in the press release. “It has become clear to the Board that she is the right person for this job, and she is definitely the right person to lead us through this complex time in the Hospital’s history.”
“As a lifelong resident of Hollister and someone who grew up near the hospital where her mom once worked as a nurse, Mary possesses a level of appreciation that few other candidates could offer. She understands on a deeply personal level the importance of this hospital for the residents of San Benito County,” Hernandez said.
