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With the City Council in the next room scrutinizing Mayor Jacob A. Palillo's plan to preserve the city's bond rating, the mayor took to the podium in the Council Chambers Thursday afternoon to announce that he will seek a second term in office.

Palillo, who said he made the decision to seek another term the moment he completed his oath of office for his first term on Jan. 1, 1992, said he was happy for the opportunity to let the people "grade me on my job performance." About 55 persons were present for Palillo's announcement.

Saying he had been severely tested in his first term, Palillo said the real issue in this year's campaign will be: "Has your mayor been equal to the challenge . . . of running your city government under the extraordinary circumstances which we have been presented with." Palillo said some of the "extraordinary circumstances" he has faced in the past three years included recurring financial problems, construction of the new drinking water treatment plant, which he opposed, and dealing with an uncooperative Council.

Palillo took aim at the Council, with which he has been at odds regularly over the past three years, accusing it of blocking his proposals and of "political nonsense."

"This is what is somewhat comical about the notion of us 'working together.' Each time we bring them a proposal, they make it known that they have the last vote. They always cast that vote against what I have offered, never offering any reasonable alternative. They have taken 'just say no' a little too far," he said.

Since taking office Palillo said he lowered property taxes and sewer fees, fixed more roads and sidewalks "than ever before," expanded recreational opportunities and beautified parks. "Our Rose Garden is back, Hyde Park is back, the downtown ice rink is back and our pride is back," Palillo said.

He also said unemployment is down, industrial job retention up, and new businesses are starting up and old ones expanding.

Palillo said there is more to be done.

Palillo is the third announced candidate for mayor. Police Inspector James C. Galie, the police department's second-highest ranking officer, and Carmen T. Morreale, former fire chief, are seeking the Democratic nomination.

Palillo, who will turn 64 Sunday, is a retired firefighter who was president of the Niagara Falls Uniformed Firefighters Association from 1972 to 1984. He served as a city councilman for two years before being elected mayor.

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