Anna Maria gives notice to FEMA on alleged fraud

Speeler and Associates workers use a boat and a barge to remove the remainder of the Anna Maria City Pier walkway and pilings July 24. Islander Photo: Ryan Paice
The T-end demolition at the Anna Maria City Pier wrapped up July 12. Islander Photo: Jack Elka

Anna Maria is reaching out to the Federal Emergency Management Agency about alleged fraud by a local contractor on the substantial improvement regulations.

The issue arose with litigation winding through the 12th Circuit Court in the case of L. Martin and Threse Quinn Hurbi v. Wash Family Construction. City attorney Becky

Vose learned of the dispute and brought it to Mayor Dan Murphy and the commission in July.

The commission voted 4-0 July 12, with Commissioner Brian Seymour abstaining, to approve a resolution directing Murphy to contact FEMA and to investigate the Hurbi permit for 759 N. Shore Drive and others.

In the matter of Hurbi v. Wash, Hurbi’s attorney researched 25 jobs that were permitted for improvements under the 50 percent rule by Wash.

Acting building official Luke Curtis emailed FEMA mitigation specialist Collis Brown July 25 asking for guidance and to report on the Hurbi case.

Curtis gave information on the alleged FEMA substantial improvement fraud at multiple Anna Maria properties for which Wash allegedly collected fees from property owners based on construction estimates for renovation projects, but submitted lower estimates to the city.

Brown replied July 25 in an email to Curtis, acknowledging the city resolution and stating the “issues described will probably require additional information … and discussion.”

Steve Martin of the Florida Bureau of Mitigation also wrote to Brown and Curtis July 25, saying he and another staff member would be available to meet in Anna Maria Aug. 6-10.

“We fully support the city taking action to deal with this unfortunate situation,” wrote Martin.

By reporting lower construction estimates to the city, the contractor could avoid FEMA’s 50 percent rule to make more improvements to ground-level homes than would otherwise be permitted.

Wash then allegedly billed Hurbi for a substantially larger amount than the project permit evaluation.

Obtaining a building permit requires submitting costs for labor and materials, which sets an amount the contractor cannot exceed on the project.

But Wash submitted permits for a 31 percent remodel, which falls under the 35 percent threshold that would require submission of invoices and receipts to verify actual costs.

The FEMA substantial improvement rule, or the 50 percent rule, applies to pre-FIRM buildings — those built prior to the existence of the Flood Insurance Rate Map in 1975. The rule requires a substantial designation for any project on a pre-FIRM building exceeding 50 percent of the building value for remodeling, renovation or improvement.

Building value costs include structural costs, finished materials, flooring, interior finishes and more. Permit costs are not included.

When a project is deemed a substantial improvement, it is required to comply with the National Flood Program, which can result in elevation of a ground-level structure.

Vose is awaiting the results of the Hurbi case to guide the city. And city officials hope to get further input from FEMA on the investigation before taking any action.