Cincinnati may hold some lessons on how to avoid the physical deterioration facing such cities as New York, Cleveland and St. Louis.

It has all the ingredients that have led to physical decay in other cities: and eroding tax base, declining population, aging structures and red ink in its budget this past decade.

But Cincinnati's water system is sound, its sewers are excellent and well-maintained, its bridge problems are coming under control and there are signs of street improvements in the last two years.

A draft study by the Urban Institute on "Cincinnati's Capital Assets" says the city is winning its fight to preserve its physical life supports through the following measures:

Unlike New York and other cities that made sharp cuts in preventative maintenance crews, Cincinnati has kept its forces fairly constant.

The sewer system's maintenance work force, which was put under a regional authority in 1968, has increased by 29 percent since 1976.

And with the help of federal job funds, street maintenance crews have been expanded in the last few years, even though state gasoline tax revenues have declined.

After building convention centers, stadiums and other lavish projects in the '60s and early '70s, Cincinnati has put the brakes on new projects and now has a policy of "planned shrinkage" of its physical structures where possible, in keeping with a declining population. That policy, according to the Urban Institute, is saving the city $300,000 in 1979, with more savings to come.

The city has a tradition of professional management, and has carefully fostered harmonious relationships with other levels of government that have allowed it to share its burdens. The regionalization of the sewer system is one example.