The Municipality of Meaford's donation to the Meaford General Hospital Foundation will go ahead.

As his first announcement as the new Mayor, Francis Richardson announced that he had worked out an agreement that ensures that the Foundation will receive the full $500,000 the municipality had committed to the Foundation's coffers.

Richardson told council at Monday night's regular meeting that he held a meeting with Foundation President Dave Glass and together they put together a compromise donation schedule that will offer the municipality some immediate financial relief, but will still provide the Foundation with the same donation spread out over a longer period of time.

"He was delighted to see we weren't coming to cancel the agreement, but to find savings," said the new Mayor.

The municipality was scheduled to donate $75,000 to the Foundation in 2008 and 2009. Council has been scrambling to find savings in the 2008 budget after the first draft forecasted a 30-per-cent tax increase.

Richardson said the deal brokered with the Foundation would see the municipality donation zero dollars in 2008 and $50,000 in 2009. From that point, the municipality will contribute $75,000 for the following three years.

"It extends the agreement for one more year, we will pay the amount out over eight years instead of seven," said Richardson. "I made it very clear how important the hospital and the Foundation are to the municipality. This is a wonderful gesture on their part," he said.

Council will deal with the Mayor's proposal at a special budget meeting scheduled for Tuesday morning. At Monday night's meeting there appeared to be unanimous support for the compromise agreement worked out by Mayor Richardson.

Councillor Jim McPherson thanked the Hospital Foundation for working with the municipality on the matter.

"It's now our test to balance the budget so we can make those future payment," McPherson said to his council colleagues.