Boston officials yesterday discounted reports that Mayor Raymond L. Flynn had "offered" to annex the fiscally crippled city of Chelsea, which has been unable to pay its bills since las week.

The reports appeared in the Boston Herald and on the United Press International wire yesterday. UPI reported that Boston "offered Monday to take over neighboring Chelsea as that bankrupt city sought a state-appointed receiver to rescue it from all fiscal mess."

Although Mayor Flynn told reporters that Boston could conceivably annex Chelsea, the mayor's press secretary, Arthur L. Jones, said yesterday that "they took a lot of liberties with his response." Mr. Jones emphasized that Mayor Flynn made his remarks in response to a reporter's question at a press conference.

Chelsea, one of the poorest cities in Massachusetts, is apparenly on its way to being run by a state-appointed receiver.

Gov. William F. Weld last week filed a bill in the Massachusetts legislature that would arrange for a five-year recievership period. The governor's proposal would circumvent the city's elected officials by temporarily eliminating the office of the mayor and rendering the city's nine aldermen, who do not support the plan, powerless.

Chelsea's mayor, John Brennan, had requested the receivership because he said the city could not close a gap of $9 million in its roughly $40 million budget this fiscal year after voters rejected the mayor's request for a major tax increase. Under the state's Proposition 2 1/4 limit on local taxes, cities cannot increase their levies by more than 2.5% a year without voter approval.

Annexation has been discussed before as an option for the city, but Mayor Flynn's remarks do not mean that Boston would seriously consider shouldering Chelsea's budget deficit.

"It's a long way away from being seriously considered at this point," Mr. Jones said.

First all, he explained, Chelsea's 40,000 citizens would have to approve the annexation plan before Boston could take over the city. And secondly, Boston would have to make sure the marriage would not prove too costly.

Yesterday, Boston's top financial official, Collector-Treasurer Lee Jackson, said any annexation plan would also have to ensure that Chelsea's fiscal burdens did not tarnish boston's A ratings.

"We're well aware of Chelsea's fiscal difficulties, and we wouldn't take those fiscal difficulties on," Mr. Jackson said. "If Chelsea is put into receivership, at the time when its budget is back in balance, then we would consider the possibility of annexation."

He said the arrangement could solve some of Chelsea's problems over the long term, but in the immediate future a merger of the two cities is unlikely.

Additional aid from the state, perhaps during receivership period, might be the necessary prelude to any participation by Boston, Mr. Jackson said.

The Massachusetts General Court is expected to converse tomorrow and begin discussion of Gov. Weld's proposal to put the city under a receiver. Lawmakers held hearings on the legislation over the weekend, and it became apparent that some members of the Massachusetts General Court may oppose the bill as unsurping the powers of elected officials.

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