While there is no tax increase in Farrell's 2003 proposed budget, a sewer fee hike could be in the works.

City Manager LaVon Saternow presented her proposed $2,085,173 budget Monday. The spending plan is up only $23,000 over this year's.

The largest increase is the city's allocation for Southwest Mercer County Regional Police Department. Mrs. Saternow said the 5 percent hike was a guess since the police commission has not passed a budget.

Police expenses make up 40 percent of the city's budget.

Due to council improving benefits for the 15 nonuniformed police pensioners, the city will have to pay $55,349 to maintain the fund. The city did not have to contribute this year.

Mrs. Saternow added she expects the state to pay $50,000 of the increase, which is normal for pension expenses.

Council believes it can eliminate the need for paying bond principal debt from the general fund. In the past, it paid the principal with money from the Universal Development Action Grant, which is funded by paybacks on loans to businesses, and the general fund. The fund should be able to handle the load this year, saving more than $150,000, Mrs. Saternow said.

Most expense increases were modest, she said.

The real estate tax levy remains at 22.67 mills in the proposal. A mill is $1 for every $1,000 in assessed property value; assessments are a property's 1970 market value.

While council raised sewer fees in 1998 to pay off debt on a loan taken out to renovate the wastewater treatment plant, the fee for operations of the sewer system has not been increased in eight years.

Mrs. Saternow said sewer fees are not covering the cost of operations.

Council Monday hired engineering consultant Gannett Fleming Inc., Pittsburgh, to study the fee structure, debt and expenses. The study could lead to a recommendation to raise sewer fees.

The company will be paid $1,900 to conduct the study.