In general councils were not abusing their powers, Sir Simon Milton said
Councils in England have been urged to review the way they use surveillance powers to investigate suspected crime.
Under laws brought in to help fight terrorism, councils can access phone and e-mail records and use surveillance to detect or stop a criminal offence.
But Local Government Association chairman Sir Simon Milton has written to councils warning overzealous use of the powers could alienate the public.
They should not be used for "trivial offences" such as dog fouling, he adds.
Concerns have been raised about the way some councils have used the Regulation of Investigatory Powers Act.
HAVE YOUR SAY
They brought these laws in to deal with terrorism, but they seem to have been used to spy on dog-walkers. Then they wonder why so many people object to 42 days
David Potts, Grayswood
Recent examples include a family in Dorset followed for several weeks to see if they really did live in a school catchment area.
Other uses have included examining rubbish to monitor household waste.
In his letter, Sir Simon said: "Parliament clearly intended that councils should use the new powers, and generally they are being used to respond to residents' complaints about fly tippers, rogue traders and those defrauding the council tax or housing benefit system."
Sir Simon identifies dog fouling and littering as examples of two offences in which the act's powers were not "necessary and proportionate".
Wyre Council in Lancashire has used hidden cameras to catch people who let their dogs foul public places - an action the chief executive Jim Corey said had drawn praise from local people.
"Dog fouling is at the top of their list in terms of issues they want the council to be tackling on the ground, so I know the public are only too pleased to see us catching people," he told BBC Radio 5 Live.
But Sir Simon urged councils to use the powers only for complaints about more serious matters.
He told BBC Breakfast: "I don't think councils are abusing their powers, but there have been one or two instances... where it could be said that perhaps some of the offences being investigated were too trivial to be using surveillance techniques."
He said councils could lose the right to employ surveillance if the act was misused, and suggested that every authority should carry out an annual review to gauge public opinion on the issue.
'Change the law'
Figures released by councils under the Freedom of Information Act show that thousands of people have had their telephone and e-mail records accessed.
COUNCILS USING SPYING POWERS
Littering - Bolton Council
Misuse of a disabled parking badge - Royal Borough of Kensington and Chelsea, London
Dog fouling - Bolton, Derby City, Gateshead and Hartlepool Councils
Working while claiming sick pay - Conwy Council
Durham County Council was the biggest user of the act - 144 times in the last 12 months
(Source: Press Association)
It is estimated that about 3,000 people have been targeted in the last year, for alleged offences that included dog smuggling, storing petrol without permission and keeping unburied animal carcasses.
A survey of fewer than 10% of councils, carried out by the Press Association, showed that spying techniques were used 1,343 times.
Civil rights group Liberty welcomed the new advice but said it wanted the government to reform the law, so that only a judge - not a town hall official - could authorise use of the most intrusive powers.
Liberty director Shami Chakrabarti said: "This is about using quite serious powers that are meant for crime, not minor matters."
Conservative local government secretary Eric Pickles said: "We need stronger checks and balances against the potential abuse of such powers to protect the rights of law-abiding citizens from Labour's growing surveillance state."
Dr David Mukarami Wood, from Newcastle University, said surveillance was becoming "normalised" in everyday life.
"I think this is quite dangerous," he said. "We've gone from a situation where surveillance was exceptional a few years ago to a situation where it's now considered to be a normal part of what any public authority, or even private organisations, are doing."