A municipality that does not have a relevant and content-rich web site that allows the administration to supply information is at a perceptual and economic disadvantage.
It's mystifying that the perspective is that a web site is inherently a technology platform only, and therefore in the realm of the IT department, still exists. In this context, a web site is a marketing and communications platform, and should be considered as part of the responsibility of a chief information officer. It doesn't take an IT department to create a web site.
What better way for a municipality to communicate with, disseminate information to, or manage information for citizens and the media?
A place especially needs differentiation and positioning to start to create a positive perception.
From the mundane (when is my garbage collected after a holiday?) to the functional (can I pay my water bill online?) to the strategic (why do we need to support a tax levy again?), a site should set vision, and generate good will for the municipality.
The perceptual disadvantage allows the local media, citizen pundits on local web-based forums, and the uniformed to create their own perceptions of what's really going on with the local government. Where there is no information, the people will make up their own opinions, informed or not.
The economic disadvantage allows other communities, who have relevant and compelling content about their municipalities, to inform prospective residents and businesses, current residents and business owners, and other interested parties, why the community is thriving and attractive. It's basic economic development: attraction, retention and expansion.
People will find information about a municipality online, good or bad. Of course this is the root of branding: It's not what an administration thinks about their municipality (or organization), but it's what they (constituents) think, that is important. And if a municipality has nothing relevant or meaningful upon which they can create informed perceptions, citizens will create their own perceptions, right or wrong.