Is it necessary to include the definition of Highly Compensated Employee in a 401(a) plan for LOCAL GOVERNMENT AGENCY since they are exempt from the provisions that use this definition?

I can't think of any reason this would be required. The only authority under which the definition of highly compensated employee is required is that most retirement plans are subject to the rules of Code §§ 401(a)(4) and 410(B). For those which are not, it is hard to see how the IRS would have any authority to require such a definition.
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Employee benefits legal resource site

My experience has been that the reviewers want it. Has anyone taken this issue above the reviewer level?

my perspective is that having "extra" definitions in a document is not a bad thing. I see 2 advantages:
1. It helps you because it keeps most of your documents similar.
2. It helps the plan sponsor because it makes modifications easier when the inevitable law changes come along.