Rockville's city manager has proposed a $21 million 1984 operating budget for Maryland's second largest city, giving homeowners a 3 1/4 cent reduction per $100 of valuation in their property tax rate, decreasing by 6 cents per 1,000 gallons the charge for water usage, and leaving the fee for garbage collection the same.

In his budget presented Monday night to the Rockville mayor and council, city manager Larry N. Blick also proposed eliminating eight full-time and three part-time positions, which is expected to result in a total of eight layoffs. Blick said he has been working with the affected workers since January, helping them prepare resumes and giving them time off to job hunt during the week.

In previous years, the city has managed to reduce the size of its work force through attrition, he said.

The proposal, for the fiscal year beginning July 1, represents a 4.2 percent increase over the current opeating budget. "In order to bring the budget in at this level, difficult choices were faced and some hard decisions had to be made," Blick wrote in his budget message, echoing a regional "fiscal austerity" refrain.

The budget proposes holding down some general government costs such as money for supplies and equipment, and by limiting increases in most city programs. Blick is proposing decreases over last year in funding for community development activities -- zoning review and the town center parking garage project -- and decreases for the cultural arts and recreation classes. Street maintenance money, money for bikeways, and money for youth services also would drop.

Despite the rate reductions, most homeowners will still see their bills increased for property taxes and service charges. Inflated assessments mean higher tax bills, and the sewerage charge will jump a whopping 22 cents, to $1.83 per 1,000 gallons, partly because of higher charges at the District of Columbia sewage treatment facility at Blue Plains.