The chief of the troubled Attawapiskat community says she believes residents don't want to take Ottawa's offer to evacuate the reserve, and called for more funding to help deal with a housing crisis.

In a letter to Aboriginal Affairs Minister John Duncan on Friday, Chief Theresa Spence said she believes reserve residents want to remain in Attawapiskat.

"Our past experience of the last evacuation from the community met with three people dying during and after the ordeal … I will consult my people regarding evacuation, but I think they are prepared to stay and wait."

She also called on the federal government to allocate money so the band can push forward with its plan to upgrade existing housing on the reserve, and to convert a healing lodge temporarily to house families now living in tents. Proposals and budgets for both were submitted to the government on Dec. 6, Spence wrote.

"My council does not lack capacity. What we lack are funds … let us proceed with the budgets and projects to move ahead and deal with the emergency for my people," she wrote.

The band's letter comes after the federal government announced it would send 15 modular homes to the troubled Attawapiskat reserve in northern Ontario to help ease the housing crisis.

Duncan told reporters in Ottawa earlier Friday that the homes, which cost around $1.2 million, would be sent to the remote reserve near James Bay when winter roads to the community are open, likely in January.

Duncan also reiterated the government's offer to either evacuate some residents from the community or move them to temporary lodgings at a sports centre or healing lodge.

Rescind 3rd-party management decision, Spence says

In Friday's letter, Spence said the community needs 22 units, instead of 15. She also called on Duncan to rescind the decision to put Attawapiskat under third-party management.

"In order to deal with the crisis, there is no third-party manager on Earth that is capable of knowing the needs, the people, the community and the resources available to plan, implement and resolve this particular issue," Spence wrote. She also added that the band would not pay for the services of a third-party manager from its "already depressed band support funding budget."

Duncan's office confirmed it has received a letter from Spence regarding the government's plans for the community.

"Our office has spoken with Chief Spence today. We will be reviewing her response and we are very hopeful that we can move forward together in the best interests of the people of Attawapiskat," a spokeswoman said in a statement.

About 1,800 people live in Attawapiskat, where a severe housing shortage has forced families to live in tents and unheated trailers, some without access to running water and electricity. Many others live in crowded, substandard housing.

Local leaders declared a state of emergency at the end of October.

The band says it will take the trailers, and will also consider a government plan to house people temporarily in the local healing lodge.

But Spence told the CBC's Tom Parry that the band can't afford to pay for either of those things out of its existing budget.

When asked whether the band or the federal government will pay for the 15 houses, the minister said, "The homes and costs associated is not our immediate concern. This is an emergency management response. We will worry about who's paying for this afterwards."

His spokeswoman later explained to the Canadian Press that Ottawa is paying for the houses upfront. But if the third-party manager eventually finds excess money in the band's allocated housing budget, that money will be diverted towards the 15 modular units.

Crisis has been 'mishandled'

Duncan again said the government would conduct a comprehensive, independent audit of the band's finances.

"It's clear that significant investment in the community has not generated the results that the residents of Attawapiskat deserve and all Canadians expect."

Spence fired back in her letter Friday, saying that there has been "much misrepresentation" on the money the band has received from the federal government.

"For the record, our audits have been filed with your department for those years, and on average the per capita funding level ranges from $9,000 to $12,000 over this time frame and is not the $50,000 as reported by the prime minister."

The government says it has given Attawapiskat around $90 million since 2006, including $4.3 million for on-reserve housing. It has also ordered an independent audit of the community's finances.

New Democrat MP Charlie Angus, who represents northern Ontario area, said moving in extra homes was a good move but the federal government needs to do more.

"Unfortunately, I think they mishandled this file all along," he said.

Sometimes the winter roads do not open until the end of January, Angus said, and weather conditions could turn extremely harsh in the meantime.

Greg Shisheesh, a community activist from Attawapiskat, told CBC News that elders in the community say the winter roads might not open until February.

Shisheesh also asked why Duncan has yet to visit the area to "hear the cries of the whole reserve of Attawapiskat."

Interim Liberal party leader Bob Rae said the federal government needs to have the people of Attawapiskat on board with their plan for the community, rather than imposing a solution.

"Whatever happens, it has to be worked out with the band and the band council and you can’t create a strong relationship in doing that if your first action is to say you’re no longer responsible, we’re sending in a third-party manager and treating people as if they have no democratic rights or position in this regard," he told reporters Friday.

Manager earns $1,300 a day

Duncan on Friday again urged Attawapiskat's leaders to work with the government's third-party manager.

The move last week to appoint Jacques Marion, from the accounting and consulting firm BDO Canada LLP, to oversee the band's finances at a cost of $1,300 a day drew the ire of many aboriginal leaders. Marion's fees could end up costing the band $300,000 a year.

Duncan said Marion's salary would be drawn from the band's governance funds and wouldn't hinder the delivery of social programs, including education.

Marion was told to leave the reserve shortly after arriving but still remains in control of the community's funding, according to a release from Aboriginal Affairs.