If you are going to let the municipality use it for a newsletter online, there is a possibility that someone else will then download that picture and use it themselves. You might not care about that, but you also posted in another thread that you were annoyed when your picture got shared on Facebook without anyone giving you credit, so this would essentially be the same thing. People will be using your work without giving you credit.
You have the right to control how your creative works are used. That's what "all rights reserved" means - that you reserve your right to maintain control over any changes, distribution, usage...whatever. When you sell a picture, you're really selling that person the right to own a copy of your picture and display it in their home. They do NOT then have the right to use it as their own or distribute it, unless you've also sold them THOSE rights as well. It seems like a technicality for those of us who are not involved in photography mainly for commercial gain, but it's an important distinction when it comes to federal copyright laws.
So, there are a few things you can do.
1) Not let them use your photo.
2) Let them use the photo without condition.
3) Let them use the photo WITH conditions.
What would those conditions be?
a) Absolutely insist that you are given credit.
b) If they are putting together the newsletter, chances are they have publishing software that will allow them to watermark the photo. You could have a visible watermark or not, but either way, I suggest you insist on an embedded watermark. It won't show on the screen, but if someone tries to download the photo, the version they get on their computers will feature a big obnoxious copyright watermark that will go across the photo (or something like that - the actual form of it differs.)
c) Payment
d) Any combination of the above
e) Probably something else that I'm not thinking of