There is some chloramine bleed-through to the FC test that can happen at high levels, but my tap water has 1.2 ppm monochloramine that doesn't show up as FC and only shows up as CC after I add the R-0003 reagent.
I'd dilute the water with distilled water and see if it still bleeds through. If it doesn't, then there is apparently a high chlorine level in your tap water and not monochloramine. And yes, 3.5 ppm is high for either though the EPA limit for chlorine (FC) is 4 ppm and for monochloramine (CC) it is also a 4 ppm limit. So technically they are in compliance, but it's probably higher than necessary.
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