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A Review of Expenditures Related to Hurricane Ike at the General Land Office

April 2009

Report Number 09-033

Overall Conclusion

The General Land Office (Land Office) is responsible for management of the Texas coastline, which was damaged by Hurricane Ike. Hurricane Ike-the third most destructive hurricane in U.S. history in terms of economic loss-caused shoreline recession on Galveston Island that averaged 136 feet and ranged from 50 feet to 280 feet along a 7.6-mile stretch of coastline.

The Land Office's Estimate of Losses

The Land Office estimates that its losses from Hurricane Ike will total $263.9 million. It expects to recover $175.9 million from the Federal Emergency Management Agency (FEMA), resulting in an estimated $88.1 million potential cost to the State. These estimates do not represent all Hurricane Ike-related damage to the Texas coast: the Land Office has proposed an additional $1.0 billion in projects to improve beaches, protect the shoreline, and make other improvements to public coastal land. While some of these projects contain components that address damage caused by Hurricane Ike, the Land Office did not distinguish which costs are for Hurricane Ike-related repairs and which costs are not related to Hurricane Ike. Therefore, the costs associated with these additional projects were not included in the estimates of total Hurricane Ike-related losses cited in this report.

Auditors' Estimate of Losses

Auditors estimate that the Land Office's losses from Hurricane Ike will total $263.9 million and that the Land Office will recover $174.6 million in FEMA reimbursements-resulting in a $89.3 million potential cost to the State.

The majority of the difference between auditors' and the Land Office's estimates of FEMA reimbursements is primarily due to differing estimated reimbursements for repairing the Blue Water Highway. FEMA must determine whether it will reimburse the Land Office for the beach restoration portion of this project. Auditors' estimate of total FEMA reimbursements did not include potential reimbursements related to the beach restoration portion of the project; the Land Office's estimate did include these potential reimbursements.

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