DENHAM SPRINGS — The city spent more money than it took in during the 2010-11 fiscal year that ended Thursday, records show.

However, income under the budget just adopted for this year is projected to be higher than expenditures until depreciation is factored into the equation.

Income for the city’s utility funds should be helped by recent increases in the amounts the city charges to provide natural gas and water to municipal customers, officials said.

Mayor Jimmy Durbin said he’s also expecting more money to be collected in sales taxes in the 2011-12 fiscal year that began Friday as a result of new businesses opening in the city.

In a tough economic period, city officials saw balances drop in the city’s governmental and utility funds during the last fiscal year.

Combined, the various funds spent $661,363 more than they took in, even before noncash items such as depreciation were included.

When noncash expenses were added, the net assets of the city’s utility fund dropped from $15.3 million to $14.3 million, the amended budget shows.

The balance of the city’s governmental funds declined from $4.1 million to $3.4 million, according to an amended budget approved by the City Council.

In response, the administration trimmed general fund expenditures in the budget for the new fiscal year, and the City Council took off a little more around the edges.

The city has budgeted $10.3 million in general fund expenditures in this year’s budget.

If the city meets its targeted revenue and keeps expenditures at the budgeted level, it should end up with $36,000 more in the general fund than the fund contained at the start of the year.

Despite lackluster sales tax income last fiscal year, the administration is projecting a 3 percent rise in sales tax revenue this year compared with what was in last year’s budget.

New businesses, including the recent opening of an Albertsons Food Center and the planned opening of a Sam’s Club in March, should provide more sales tax income, Durbin said.

Sales taxes make up about 64 percent of the city’s general fund revenue.

Cuts made by the City Council to the administration’s proposed general fund budget include reductions in city contributions to youth and family counseling and to the Council on Aging.

The budget includes no cost-of-living raises for city workers.

Durbin said that if the city’s economy improves, he would consider recommending that workers receive a pay raise next year.

The rising cost of workers’ retirement funds, to which the city is required to contribute, has been a drag on recent budgets and will hit the city for an additional $142,486 this year, the mayor said.

Included in this year’s budget, the city plans to spend $341,606 as its share of $3.9 million in capital outlay costs.

The capital projects include work on Cockerham Road, resurfacing and partial widening of Tate Road and widening Rushing Road to three lanes from Range Avenue to Beau Village subdivision.

The city’s utilities should do better this year than last, city officials said.

In the new fiscal year, the city will be collecting an additional $5 a month from each water user and an increase to natural gas customers of 20 cents per 100 cubic feet of gas supplied by the city.