While at root a General-Law City it's entirely possible for the five-member City Council to have at some point in the past passed policy directives that are akin to those that might come from a HOA.
Seaside City Council also serves as the board of directors for the Redevelopment Agency of the City Council ... and "Redevelopment" can easily code for "we have a strong vision of what our town|small city should look like".
> What is the possible reason for such an ordinance that would not also apply to a mural?
If such an ordinance exists to hide 'unsightly' cars | boats behind a fence then it's possible that when it was drafted and passed in (say) 1960 (?) no one thought to specify a tight restriction on the paint job on any fence ...
"In any sufficiently complex set of rules, there's always a loophole."
~ Kurt Gödel, homeowner.
For detached housing, it's all the city and bylaws. Bylaws might cover common nuisance laws, such as having a bunch of rusted cars on the lawn, or having your lawn covered in dog feces. Both of these are often covered under pollution, if you live in a rural area on a well, dog shit runoff can contaminate a well. And rusting cars often have old gas and oil and other contaminants, same logic.
But realistically, these laws are also passed because "unsightly".
One difference between an HOA and a city government, is at least in Canada democracy is involved. Especially smaller city governments. I've noticed larger municipal governments aren't as democratic, just due to the size and scope of things. For example, knowing your mayor on a first name basis, in a municipality the size of <10k people, is different than a mayor of a 1M+ city.
In the smaller case, you often have the mayor's cell phone number and email, and your councillor's, and you just.. you know, talk to them.