Not exactly correct. Your statement is too broad and absolute. Pennsylvania provides immunity from lawsuit for damages to local officials but that immunity does not cover all acts of the agency and its employees; there are some things for which they may be sued. While defamation generally falls under the scope of immunity such that the agency would be immune from suit, the fire chief has two potential hurdles to getting the benefit of that immunity. First, the act must be within the scope of his official duties. Emailing/texting the landlord to rat out the tenant I would argue is not within the scope of his duties and thus would not be covered. Even if the court were to hold it was part of his official duties, the law excepts from immunity the following:
In any action against a local agency or employee thereof for damages on account of an injury caused by the act of the employee in which it is judicially determined that the act of the employee caused the injury and that such act constituted a crime, actual fraud, actual malice or willful misconduct, the provisions of sections 8545 (relating to official liability generally), 8546 (relating to defense of official immunity), 8548 (relating to indemnity) and 8549 (relating to limitation on damages) shall not apply.
42 PA Con. Stat. § 8550. Thus, if the text or e-mail is not something that is usually done but was sent in this instance out of malice or if the police chief knows the fire was legal but said it was not and thus commits willful misconduct, he would not be protected from a lawsuit.
In short, the police chief does not have absolute immunity for this if he defames the OP. It may still be possible to sue for that. There is still, however, the issue of damages from the defamation that I raised earlier.