In a unanimous vote, trustees transferred $1 million from the general operating cash reserves to the capital projects fund, leaving just enough money to cover deficit budgets over the next two years. After that, if the village doesn't receive an infusion of cash or doesn't begin dramatically cutting expenses, then its general fund reserve will begin dipping below its target balance of 35 percent of annual expenditures.

And that debate-in which village officials will try to convince voters that increased revenues and not decreased services are the answer-will begin sooner rather than later.

"I think really that discussion in terms of a community dialog is this spring and summer," said Village Manager Kathleen Rush.

"It's not going to be an easy discussion or a slam dunk. Voters have shown they will support things that are tangible. It's going to be more difficult.

"But this community prizes public safety, the landscape, the landmark designation and its well-plowed streets," Rush added. "To do that [voters] have to grant a request for more dollars."

Essentially, Riverside officials calculated the amount of money it expected to have in its general fund balance at the end of 2008-$4.35 million-and subtracted out the amount of that fund designated for specific expenses ($196,970) and the amount needed to maintain at least 35 percent of annual expenditures in the fund ($2.77 million).

That left the general fund with a roughly $1.4 million undesignated surplus. Instead of using that entire amount to fund deficit budgets for several years, the board moved $1 million of that $1.4 million into a fund dedicated for capital projects. The $400,000 left in the fund will hold the village over for two years, until the end of 2010, before the village must either make significant cuts or receive an infusion of cash from voters.

That new revenue will come from one of two sources, according to officials, who pointed to the Long Term Financial Security Committee's findings from this fall.

It will come from either a general property tax referendum or through a referendum giving the village home rule powers. Home rule will give Riverside the ability to create fees, such as a real estate transfer tax or gasoline tax, to help gain more money for general operations.

Home rule also gives the village the ability to raise property taxes annually beyond levels set by state tax cap laws.

"The Long Term Finance Committee identified the options that are out there," Rush said. "It's either a property tax increase or a double referendum for home rule and a real estate transfer tax."

However, there is sure to be some opposition to both proposals, quite possibly from at least one member of the Long Term Financial Security Committee, Michael Gorman, who wrote his own dissenting report in the wake of the one adopted by the majority of that ad-hoc committee.

Gorman's contention has been that the village should look to limit its own spending first before going to voters for additional money. He has advocated cutting personnel, saying that such moves would not directly affect services to residents.

However, trustees argue the opposite.

"This board came to the conclusion that it was not possible [to cut personnel] without affecting service levels," said Trustee Thomas Shields, who is the village board's finance chairman. "Comments about levels of compensation would indicate that we overcompensate people. It's not true."

Shields was basing his statement on a recent salary survey completed for the village by McGrath Consulting Group. According to that study, which included data received from 12 suburban municipalities, 79 percent of Village of Riverside employees have salaries that are lower than average.

Beyond that discussion of service cuts, officials determined to move the general fund's undesignated reserves into the capital projects fund, because they maintain that it make sound financial sense. Further, Shields said, the undesignated cash reserves were built over the years by an unwillingness of village government to expend money for capital improvements.

"The deferred capital expenditures allowed these reserves to build up," Shields said. "It's wrong to fritter it away on operating deficits."

Moving the money to the capital projects fund also gives the village flexibility to address expensive emergency repairs and the ability to seek large grants that require the village to match funds.

"There are lots of good reasons to do this," Rush said. "We don't have a funding source for capital expenditures, and this gives the board the ability to address capital concerns over the next two years. It also gives us a way to have money to leverage large grants.

"It also really makes the board and community cognizant of our severe fiscal constraints."