Yes, but there are no decurions in Morrowind.
Doh! Sorry, it's been a little while since I last played Morrowind you're right. Hmmm, it's too close to Ebonheart to be a remote outpost. My guess is that Pelagiad was a precolonial Legion fort that maintained the highroads around Vivec, protected the road to Ghostgate, and kept the Ashlanders from wandering into 'civilized lands'. This assumes that Balmora was settled after colonization of Vvardenfell opened up (a fair assumption too).
Therefore, the ruling authority would be the legion, therefore, either the ranking legion officer would simply keep his rank as authority of Pelagiad or he'd be the Governor General as I suggested earlier. However, if you want to play up the exoticness of Netch and Netch Farming in other places of the Empire, you can make a case that the EEC has some limited interest in the lowlands and so the Legion's primary presence is in protecting EEC interests like they do in Caldera. But that'd sky-rocket the value of a Netch. Who knows, maybe people in the Imperial City like eating or concocting potions out of a Netch's air-bladder because it makes them fly for a time.
I kinda like the way that sounds. And with that idea in mind, http://www.uesp.net/wiki/Morrowind:Angoril would be in charge of the city. Although he could/should have a small group of officials who advise him on how to run the city, perhaps other members of the Imperial Legion. Then again, he is an Altmer and I think lore-wise, the ruler of a one of the main cities would and should probably be either a dark elf or an imperial. Since it's an imperial charted town, I'm kinda leaning towards having an Imperial legionnaire imperial man be in charge. He would have just been another troop sent over there to aid Angoril, and eventually took over running the city while angoril was in charge of the jail cells, etc....
And the EEC is so far up north, I don't think they'd be of any concern to Pelagiad. Or perhaps I wasn't clear on what you were getting at.
Pelagiad wasn't formed on a mining charter, that was Caldera.
But still, I don't think it will follow regional customs in naming an authority. It doesn't follow regional customs in any other way.
IIRC, NPC's in Caldera call someone at the Governor's house a "reeve". If you wanted a more minor authority figure, on par with a mayor, without introducing new elements to lore, "reeve" might be a good option.
I couldn't find any reference on uespwiki of the usage of the world "reeve". You can't recall who said it?