Kirk:
Good question. I play most of my golf on muni's, and although I don't disparage them (they are what they are -- courses for the masses) there is a sameness to their look and the way they play that can get tedious.
Knowing budgets are limited for most muni's, I'd do these three things that wouldn't seem to cost a ton of extra money:
1) Put sand in sandtraps, and get rid of the boulders in them. The single biggest difference in quality I've noticed between most muni's and other courses is the quality of sandtraps; most muni sandtraps range from average to abysmal.
2) Widen the fairways, and cut down trees. Small digression -- many muni's were built in the 1950s and 60s, when cities were flush with cash, land was cheap, and golf became a game for the masses. Many many many trees were planted, and now they're all mature. I'm struck by how similar most muni's play; from the tee, the fairways are defined by tree-lined corridors, so you hit for the middle of the fairway, and then aim for the middle of the green, as few muni's really tuck their pins behind traps or on ledges. Widening fairways, and cutting down trees, opens up the angles of attack to a green (not necessarily better angles, just more of them), and increases the need for strategic thinking on courses. I'd leave enough trees to define playing areas between holes, but most muni's I play could do without about half of their trees that are now in play.
3) DON'T grow the rough to make muni's harder. Few things slow down play more on muni's than overgrown rough (and the endless hunt for wayward shots). This is a muni, after all; it's golf for the masses. My view is that rough on a muni should be somewhat penal, largely by decreasing the length a shot will carry/run out. You should be able to make progress toward the hole from muni rough, rather than simply punching out to the fairway.