Midvale residents don't face tax increases, but the city administrator could receive a 10 percent pay hike if the proposed $3.4 million 1987-88 budget is passed, City Council members learned Tuesday.

The council reviewed public works and administration budgets that include a 10 percent pay hike for City Administrator David Colvin, but Col-vin said his contract has yet to be negotiated.The contract negotiations, to held in secret session, will help bring Col-vin's salary in line with other area city administrators, Midvale Mayor Everett Dahl said Tuesday.

The City Council recently set Mid-vale's 1988-89 tentative budget. It includes a 5 percent merit increase for some employees. The raises aren't automatic and will granted depending on performance, Colvin said Wednesday.

The $236,000 budget decrease is due largely to a 1986-87 budget surplus added to this year's budget.

Council members also reviewed the police department's $26,400 proposed budget increase. It includes purchase of four new patrol cars and a computer.

Excluded from the administration budget was an earlier plan to remodel the City Hall. The budget will still provide for partitioning of city offices. The city has agreed to pay half of the salary for a receptionist as part of a county-sponsored job training program. No other departments have asked for more employees in the budget, Colvin said.

The largest expected revenue source for the city will remain the sales tax. The city is expecting to receive $20,000 more in fiscal 1988-89 than was received this year. Year-end sales tax receipts are expected to reach $1.7 million.

The council members will hear testimony on the budget at 7 p.m. June 7 in the council chambers. They are scheduled to adopt the budget on May 14 during their regular council meeting.

After the June 7 public hearing, the council plans to discuss how to spend the $415,000 surplus in this year's capital improvement budget. Funding proposals include expanding the city's fire station and making street improvements.