Municipal fiber shouldn't mean "municipal ISP".
IMHO, the municipality should charter a municipal corporation and use the municipality's bonding authority to fund the network buildout. Obviously the relevant experts should be hired from the utility and telecoms environment so that it's built to whatever the current standard is in such a network, with an eye towards long-term viability and maximum flexibility.
Once built, the fiber network is only that -- a fiber network. Part of the network buildout should include a data center, where network operators who want to offer services on the network may colocate their equipment and buy into the network. These will be the ISP(s) that you choose your services from. It should be wide open, so that anyone who wants to become an ISP of some kind can rent access at the data center and offer services.
The municipality has statutory authority and ownership of the fiber corporation, but doesn't "run it" -- The Municipal Fiber Corporation should have its own management that knows how to run the network, and operates it on a non-profit basis, charging connected users and network operators/ISPs whatever amount is necessary to maintain the physical plant. This also keeps the city council, police department and other nosy political entities out of the network as well -- it shouldn't be a city department.
The MFC doesn't and isn't allowed to offer services on the network -- that keeps it from competing with private businesses. Schools and other government entities can use their own budgetary dollars to buy into the network as ISPs at some government rate, but not for free.
This way you end up with a professional managed network, run as a non-profit, but offering for-profit business access to a huge subscriber base on a state of the art infrastructure that they pay to access, but don't own.