The Rockville City Council adopted a $21 million 1984 operating budget last week and approved a 1-cent reduction per $100 of valuation in the city's property tax rate.

The property tax rate was reduced to 89 cents, the lowest rate since 1972. The city water rate also was reduced by 6 cents, to $1 per 1,000 gallons.

Despite the rate reductions, the average homeowner will see a $30 to $40 increase in taxes and service charges, according to a city official. Higher assessments will cause higher tax bills even with the lower rate. Sewer fees soared by 22 cents to $1.83 per 1,000 gallons to cover increased charges for treatment at the District sewage treatment facility at Blue Plains.

The city budget, which is 4.9 percent higher than last year's budget, will be funded mostly through property taxes totaling $7.8 million.

The council also approved a $26.7 million, six-year capital improvement budget at last week's meeting.

Projects for the coming year include $895,000 in improvements to Rockville Pike, including landscaping, lighting and intersection improvements. Future projects include landscaping several intersections within the Town Center and extending Ritchie Parkway between Seven Locks Road and Rockville Pike.