By Eliza Ridgeway

In a bid to gain more funding for town infrastructure projects, the Los Altos Hills Finance Committee has proposed chartering the town.

Speaking at the town council meeting May 11, committee member Jim Lai said that changing the town’s legal status could lead to more money for such projects as utilities undergrounding and sewer upgrades.

Most cities operate under state law and are general-law cities. State law determines that mayors are not elected and that the position rotates, that five members constitute a city council, and that councilmembers be elected not by district but citywide.

A charter city draws up a charter of rules on which its residents vote. San Jose is a charter city - it has 10 councilmembers, elected by district and elects its mayor.

Lai said members of the finance committee have only one interest in proposing chartered status: property transfer taxes. Santa Clara County collects a 0.11 percent transfer tax on real property transactions, paid by the seller. Los Altos Hills splits this take with the county 50-50.

The three Santa Clara County charter cities - Palo Alto, Mountain View and San Jose - impose an additional 0.33 percent tax. Property buyers and sellers split the cost.

For a $1 million property, the additional tax would bring in $3,300. Because charter cities can stipulate who pays the

transfer tax, Los Altos Hills could, for instance, determine that the burden falls entirely on the buyer.

Another perceived benefit of charter cities, according to Lai, is exemption from the general-law requirement that cities pay prevailing wages.

The city council did not indicate what action the town would take on the proposal. If the idea goes forward, the council or an elected commission would draft a city charter and submit it to a town vote.