I would strongly recommend the works of Marcus Buckingham starting with his first book First Break All the Rules, followed by Now, Discover Your Strengths, and finally The One Thing You Need to Know.

I would recommend the following:
Leadership Without Easy Answers by Ronald Heifetz
Re-imagining Government by Barry Quirk
Caught Between the Dog and the Fireplug, or How to Survive Public Service by Kenneth Ashworth
The Spirit of Public Administration by H. George Frederickson

I am a huge fan of John Maxwell's work. I would recommend these books:
Leadership Gold
The 21 Irrefutable Laws of Leadership
5 Levels of Leadership- It's new & I am only half way through it, but I really like what it has to say.

Brandy, I would strongly recommend the inclusion of the 2011-2012 Baldrige Criteria for Performance Excellence (referred to as the Business/Nonprofit Criteria) as used by businesses and nonprofit/government organizations. The Criteria provide a systems perspective for understanding performance management in just 19 pages (pp 7-26). They reflect validated, leading-edge management practices against which an organization can measure itself. With their acceptance nationally and internationally as the model for performance excellence, the Criteria also represent a common language for sharing best practices among organizations, and, best of all, this document is absolutely free at http://www.nist.gov/baldrige/publications/upload/2011_2012_Business_Nonprofit_Criteria.pdf I have attached a pdf copy.

Although I'm not a City Manager, I've had several recommend "The Leadership Challenge" by Kouzes & Posner. It is founded on years of good leadership research which they flesh out well with anecdotes.

Brandy - I find the Denhardt's (Robert & Janet) leadership books very insightful. The Dance of Leadership is my favorite.

Brandy, I'd suggest "Execution-The Discipline of Getting Things Done," by Bossidy and Charan.

Hi Brandy: The Alliance for Innovation Ambassadors recently completed our Leadership Quality in the Six Qualities linked to Innovation Series. Below is the reading list. Some of these were also suggested from the Senior Executive Institute at the Weldon Cooper Center for Public Service:
* 7 Habits of Highly Effective People by Steven Covey
* A Whole New Mind: Why Right-Brainers Will Rule the Future by Daniel Pink
* Bowling Alone: The Collapse and Revival of American Community by Robert D. Putnam
* Drive: The Surprising Truth About What Motivates Us by Daniel Pink
* Good to Great: Why Some Companies Make the Leap and Others Don’t by Jim Collins
* How the Mighty Fall: And Why Some Companies Never Give In by Jim Collins
* Leadership and Self-Deception: Getting out of the Box by Arbinger Institute
* Man’s Search for Meaning by Viktor E. Frankl
* Switch: How to Change Things When Change is Hard by Chip Heath and Dan Heath
* Talent is Overrated: What Really Separates World Class Performers from Everybody Else by Geoffrey Colvin
* The Art of Possibility: Transforming Professional and Personal Life by Rosamund Stone Zander and Benjamin Zander
* The Five Dysfunctions of a Team by Pat Lencioni
* The Hero with a Thousand Faces by Joseph Campbell
* The Speed of Trust: The One Thing That Changes Everything by Steven Covey
* You Are What You Say: The Proven Program that Uses the Power of Language to Combat Stress, Anger, and Depression by Matthew Budd and Larry Rothstein

One addition to many great suggestions: After reading Jim Collins' "Good to Great", also read his short monograph "Good to Great and the Social Sectors". A valuable interpretation for the public and non-profit sectors.

The Alliance for Innovation staff is reading right now "The FIVE Dysfunctions of a Team.". Written as a fable, it is an easy read and good team building principles. Author is Patrick Lencioni

Brandy,
Great question. Many of the books that have been mentioned are well worth reading. To your list I would add Peter Drucker's The Effective Executive.

One other source of valuable information that you can put to use almost immediately is available for free in podcast form at a website called Manager Tools (www.manager-tools.com). The podcasts are produced by a small team of management consultants, and although not specific to the world of local government, I've found the insights and recommendations to be extremely useful and have put many into practice with positive results. There are about 500 podcasts archived on their site and it can be quite daunting for someone taking a look for the first time, so feel free to contact me directly if you have any questions.

I second Michael Baker's recommendation of Manager Tools. You won't find a single resource that provides better management advice - advice that is both practical and actionable. I highly recommend it.

Here's a few I like that haven't been mentioned yet:
(1) The Leader's Handbook by Peter Scholtes
(2) The Fifth Discipline by Peter Senge
(3) Community - the Structure of Belonging by Peter Block
(4) something about Deming -- maybe The Deming Management Method by Mary Walton or Deming himself -- Out of the Crisis
(5) Dialogue: The Art Of Thinking Together by William Isaacs
(6) Finding Our Way by Margaret Wheatley
(7) Appreciative Inquiry by Watkins, Mohr and Kelly
(8) The Art of Facilitation by Dale Hunter
(9) Understanding Variation by Donald Wheeler
(10) Fourth Generation Management by Brian Joiner

Thanks for all of your feedback and comments. I have a pretty great start and an amazing book list.