For the second year in a row, Farrell council has no plans to raise property taxes to support its 2004 budget.

In October, City Manager LaVon Saternow presented a proposed budget of $2,188,582. Since then, the proposed spending plan is up by nearly $20,000 to $2,208,544. Council approved it on first reading Monday night.

The biggest allocation -- $877,700 -- is the city's payment for Southwest Mercer County Regional Police Department. Farrell's assessment is the largest of the three municipalities served by the force. Police also serve Wheatland and West Middlesex.

The largest increases in the spending plan are for employee and retiree health insurance, Mrs. Saternow said.

This year, the city paid $231,000 for employees' and retirees' hospitalization. Mrs. Saternow said this year the cost was $8,820 per employee; next year, it will be $10,500.

Because of the higher costs, for the first time city employees will pay a portion of their health-care premiums.

Mrs. Saternow said unionized hourly and salaried employees will pay about 4è percent of their premiums, or about $40 a month.