Should heroes who are commanders gain exp sitting in a city?

First level up your governers while questing to give them early abilitys then move them into the town  after getting a few levels. Commanders work well with armies so spend a few points in their army buffs then focus on city buffs. The army buffs help if your town with the governer is attacked. 

I have just released a mod to address that very issue, as it has always bugged me...

Monument XP mod for LH

This mod also adds XP to stationed units, so it does change the way you play LH a bit. See above link for details, and you will of course need to enable mods in the game options to see it ingame.  You'll also need to start a new game, as existing savegames save the 'game state' as it was when you started that game.

As far as Vanilla LH, the Adventurer's Guild does provide 1 xp/season (100% of the time as the 25% chance thing doesn't work), but that's fairly far down the tech tree, and higher level units have higher xp leveling costs, so you won't see much benefit out of the AG for a given Sov/Champ/Unit after say level 4 or so.  Other than that, Administrator types (sidelined champions or whatever) do not gain any XP while in the city, unless they are attacked and survive of course.