A council website should support users needing grassroots 'community' information and could engage more effectively if it had a companion portal (or even better - as part of its main site) for communities, business and residents to participate with; much like the model at - http://www.citysoup.ca
Encourage interactive interesting discussions about particular elements of a proposal - say, a new Local Plan - rather than shoving a large indigestible document out there and allowing the usual suspects to fire back a single (usually predictable) "response".
Allow local residents to initiate petitions to council on the website.
And RSS. But maybe I'll post that elsewhere.