The Fairfax City Council authorized the city treasurer to borrow up to $500,000 in short-term loans to cover what city spokesman Thomas Welle called a "temporary cash flow problem."

Although the city has projected revenue deficits for the 1984 fiscal year that starts in July, Welle said the action taken last week was a case of more bills coming due than the treasurer had expected, rather than the start of the anticipated fiscal crunch.

Welle said that $500,000 was borrowed from First American Bank of Virginia at 10 percent interest. The city will pay it back in two weeks, he said, when revenues are expected to pick up.

Whether the city has experienced this sort of shortfall before is unknown, Welle said, because former treasurer Francis L. Cox, who held the job for four terms, handled everything herself.

Cox was voted out of office last year, before she was convicted of embezzling city funds. She reportedly left the records in shambles. Fairfax City has sued Cox and her bonding firm in an attempt to recover $600,000 missing from city coffers.

"To do it right, keep it above board, the council decided to go ahead and borrow the money," Welle said.