The office is responsible for mediating citizen complaints against municipal departments and agencies; from procedural complaints to specific problems with high level employees. After gathering information about a complaint, staffers are required to both close the case and write a formal report detailing the investigation and the subsequent actions.

That’s were the trail goes cold.

According to the report, auditors were unable to find any investigative case summaries.

While the number of unresolved cases has grown exponentially over the past five years, there were no reports to ensure the cases had been resolved or even investigated.

“We were unable to find copies of any formal investigation reports completed by the Ombudsman’s Office,” wrote Peter Raiskums, Director of the Internal Audit Department. “Moreover, the Ombudsman’s Office did not always prepare an annual report and did not ensure that the 2009 annual report was accurate.”

Assembly members point to recent drastic budget reductions and personnel cuts as a key contributor to the backlog.

“What do you give up?” said Assemblyman Paul Honeman. “If you’re working with four people, and you reduce that to half, and the number of complaints and concerns come in by double, I mean that’s a recipe for failure.”

Despite a ten percent increase in complaints in 2008, the Office of the Ombudsman continued to see budget cuts in 2009 and 2010.

Office staff handle an average of 130 cases at any given time. More than 750 cases were officially closed out in 2010. However, without any investigative reports on the cases, audit staff say there’s no way to be sure.

“The findings are what they are,” Honeman said. “They’re concerning and disturbing, and I think we need to have some strategies, good leadership here would help.”

Representatives from the Office of the Ombudsman were unavailable for comment.

Introduced by Wasilla Rep. Wes Keller, the measure would establish a “parental choice scholarship program” allowing parents to use state education funds outside of traditional public schools.

“The parental choice scholarship program is established for the purpose of providing public funding of the cost of attending grades kindergarten through 12 at a public or private school selected by the student’s parent or legal guardian,” reads the bill language.

The measure includes specific requirements for eligible schools, including health and security standards, nondiscrimination and selection procedures and financial accountability mandates.

The proposed legislation is now being heard by the House Education Committee, where members focused primarily on a provision of the bill allowing districts to provide transportation to private and charter schools involved in the scholarship program.

“It is my intent and my understanding that the school district will be able to choose whether or not to provide transportation to children based on where the children need to go,” Keller said.

However, Rep. Peggy Wilson remained concerned the bill would open up the state to charges of inequality, questioning whether districts would be able to provide transportation to every school covered by the scholarship program and how the public would perceive any discrepancies.

“I’m concerned because if the district has that option, I don’t want some parent suing the district saying it’s not fair, because they’re paying for the transportation here but they’re not paying for the transportation over here,” Wilson said. “I know what human nature is, and I know that parents will push the button as far as they can.”

A second hearing on the infant bill is scheduled for Friday.

 The 2007 legislation created a financial and logistical partnership between the state, TransCanada Alaska LLC and Foothills Pipe Lines Ltd. with the intent of creating an Alaskan gas pipeline.

Nearly four years after the bill passed, no significant progress has been reported  and lawmakers have begun to question to feasibility of the project.

“Moving forward is something they have to be doing,” said Rep. David Guttenberg. “That’s one of the reasons we asked to make sure we have records. The firm commitment side of the economic is confidential and I don’t think we ever expected to know that but we did expect to see something happen.”

The partners had not released the results of the recent open season, and House Bill 142 would allow legislators to declare the project uneconomical and back out as soon as August if the partners could not prove they had received firm transportation commitments by July.

Critics of the bill, including TransCanada, say it would violate the contract between the pipeline companies and the state by allowing the state to withdraw from the project.

Supporters of the bill, including representatives from both sides of the aisle, say the bill would promote transparency and financial responsibility.

“We’re very clearly saying this bill does not have any effect on the obligations, roles, responsibilities or possible execution of execution in that provision,” said Rep. Mike Hawker. “This is simply creating a relationship between the legislature and the administration.”

Representatives and officials alike say the bill would provide a justification for the hundreds of millions of dollars entrusted to TransCanada under AGIA, and give the state an alternate plan for developing a pipeline if AGIA has not moved forward by July.

“We’re not asking them to violate a contract and we don’t believe this bill does that,” said Tom Wright of the Legislative Affairs office. “We’re just saying that, if the project is not economic, if precedent agreements or firm transportation commitments (as noted in the bill right now) haven’t been reached, then the administration is to tell us that and we’ll go on our merry little way.”

“Removing the upside to the degree the progrecivity feature does makes it much more difficult to compete for investment dollars,” said Marilyn Crockett, Executive Director of the Alaska Oil and Gas Association, of the current tax regime.

Crockett testified before the House Finance Committee today on the potential effects of House Bill 110, which would cut production taxes and provide $2 billion in tax credits annually.

The present tax structure, enacted by the 2008 Alaska’s Clear and Equitable Share Act, includes a built-in tax increase based on gross profits. Starting at 25 percent, the tax would increase steadily and steeply, and some larger producers found themselves paying as much as 85 percent of gross profits.

While the proposed tax overhaul would keep the progrecivity tax, it would be capped at 40 percent of gross profits and producers would have the added advantage of $2 billion in annual tax credits.

Today’s testimony focused on declining North Slope exploration, and industry representatives told lawmakers the exponential nature of the current tax made it difficult to expand. It is a balancing act, they said, between the cost of production and the point when the tax outweighed any potential rewards.

The proposed bill might not be a silver bullet, but companies claim it’s a step in the right direction.

“I think time will tell whether it hits the sweet spot,” Crockett said. “Recent history has shown that activity levels are down, investment levels are down, so we see a declining trend, production is down, clearly something needs to be done.”

Some lawmakers remain skeptical, though, and questioned the need for further production incentives when companies have already invested billions in North Slope infrastructure development.

Rep. David Guttenberg said the pipeline and other North Slope facilities represent a significant portion of oil company investment, and said he did not believe the current high tax rate would actually cause companies to abandon those  investments.

“If the production numbers go down, keeping the pipeline flowing seems like it should be a major responsibility of yours for the liability of stranding all of those things and the risk of the DR&R  happening,” Guttenberg today told representatives from BP Alaska.

In order to appease advocates on both ends of the spectrum, lawmakers discussed tailoring various aspects of the bill to still provide tax credits while ensuring companies used the funds for exploration, not maintenance.

Low production numbers are not a new trend, Guttenberg said, and the legislature could not combat the problem alone. In order to move forward with the billion dollar legislation, companies would need to meet legislators halfway.

“If low flow causes the pipeline to stop flowing,” Guttenberg said. “You can’t put your hands up and say, nobody told me.”

“In a practical sense, we’re running out of time,” said Ethan Schutt, Senior Vice President of Land and Energy Development for the entrepreneurial native corporation.

The $163 million project included $25 million in state grant funding through the Alaska Energy Authority and $44 million in stimulus funding, with the provision that the project be completed by 2012.

Plans for the farm call for 33 turbines generating 144,000 megawatts of power annually, power that could light roughly 17,000 Anchorage homes. With Cook Inlet gas supplies in steep decline – local utilities expect demand to exceed supply by 2013 – CIRI officials said the farm would be an ideal panacea for the region’s energy problems

However, the project has barely made it off the paper.

The original financial plan called for early financial commitments from local utility companies, and a promise to construct and operate the transmission line carrying power from the island to the mainland grid.

In a September meeting with city officials, CIRI representatives said the corporation was nearing an agreement with ML&P and the project timeline called for finalized power purchase agreements by November.

As of today, the project has no customers.

“We’ve been accommodating, and probably too accommodating to these railbelt utilities in letting some of the timelines we’ve set go by,” Schutt said.

ML&P representatives said they could not comment on ongoing negotiations, but CIRI officials said they had reached a deadlock.

The $44 million federal stimulus grant was awarded with the stipulation that the project be fully operational by 2012, yet the bulk of the farm has yet to break ground.

Even if power purchase agreements were signed immediately and construction began this summer, Schutt said there is a chance the project would not be completed by the start of 2012.

Besides the loss of the federal dollars, the state would lose $25 million in initial investment and the entire project would be forced to reboot, refinance and head back to the drawing board.

“I’m not going to give another deadline,” Schutt said. “We’ve given the utilities several deadlines, they’ve blown through all of them, and at this point we’re trying to see if we can hold on to the project.”

The bill has passed the House Resources Committee, and would provide up to $2 billion in tax credits annually while slashing production taxes by as much as 50 percent.

Sparking an inferno of discussion on both sides of the aisle, supporters said the bill would further incentivize Alaska’s declining oil industry while critics claim it would be a massive cost with no discernible benefit.

“If we’re going to give the oil industry$2 billion a year for the next five years,and possibly more, there has to be more certainty that we’re going to get more production and jobs,” said Rep. David Guttenberg. “So far, we haven’t seen anything like that on the table.”

Producers point to industry numbers – last year, not a single exploratory well was drilled on the North Slope and production through the Trans-Alaska Pipeline is down nearly 60 percent – to assert something needs to be done about Alaska’s stringent tax structure.

The most expensive tax in North America and ranked 117 out of 129 oil provinces worldwide, Alaska’s Clear and Equitable Share tax claims as much as 75 percent of company’s gross profits annually. Including other fees, some oil giants lose nearly 85 percent of gross profits to taxes.

Despite the low production numbers, critics of the bill said increasing capital expenditures within the industry point to a stronger commercial climate than companies lead legislators to believe.

Department of Revenue officials say the growing spending is due to increasing maintenance needs for aging North Slope facilities, and industry spending has increased from $4.7 billion on 2009 to an estimated $5.5 billion this year.

“I want to know why the industry has not been doing more production themselves, because they’ve got hundreds of billions of dollars worth of facilities that they seem to be willing to strand,” Guttenberg said. “There’s something wrong in that equation.”

Guttenberg said he would not support the bill without some promise of increased production, a promise that oil companies have yet to give.

Following invited testimony this week, the House Finance Committee is scheduled to hear public testimony on the proposed bill, but Guttenberg said he is still unsure how the final product would play out.

“I think we’re pretty mixed, I think there’s a certain level of cynicism at the end of the day about what we’re getting,” Guttenberg said. “Some people are completely confident that doing this will create opportunities, but I think that there’s some of us that, you know…you would not do business like this.”

The debate over Gov. Sean Parnell’s controversial proposed oil tax overhaul continued today in the House Finance Committee, and Gara questioned representatives from the Department of Revenue about the minute financial details of the multi-billion dollar bill.

By slashing production taxes on oil and gas by as much as 50 percent and providing up to $2 billion in tax credits annually, supporters of the bill said it would bolster Alaska’s faltering oil industry and protect the state’s primary source of revenue.

Opponents of the credits, however, claim companies are padding prices to earn millions in credits when there is no immediate production crisis.

“There’s been some discussion that the credits are too liberal,” Gara said. “We’re giving away so many credits that companies are gold plating, so some of us have started to talk about limiting the credits to the things we want to see happen.”

According to DOR numbers, oil and gas industry investment in Alaska has increased steadily over the past several years, from $4.7 billion in 2009 to an estimated $5.5 billion this year, and Gara pointed to the increased investment as a sign of a healthy oil industry.

Department officials aren’t so sure.

Commissioner Bryan Butcher said the department does not collect information on where the billions in industry investment are spent, and oftentimes it is used to maintain existing wells rather than develop new reserves.

“We would talk to somebody in the industry, they would say, you know a lot of that’s going towards trying to replace things in a mature field,” Butcher said. “We’ve been producing up there for a long time, it’s not exploration, but we at DOR don’t know that, we don’t have that kind of information,”

Audit Master Lennie Dees said current regulations only required oil and gas companies to specify whether their expenditures where operating or capital, but their was no way to determine if capital costs were used for deferred maintenance or new development.

“We do get information on where they’re spending the money, not how they’re spending the money,” Dees said. “That’s part of what we’re going to change about, you know, the type of information that we’re requesting.”

The information on new well development and pipeline production is grim. Oil volumes in the Trans-Alaska Pipeline have decreased by nearly two thirds of total capacity, and no new wells were drilled last year on the North Slope.

Department numbers show an increase from 107 credits distributed in 2006 to roughly 400 last year, or roughly $151 million on 2006 to a high of $406 million in 2010.

Given the plethora of credits available and heightened investment, Gara said the industry should have an abundance of resources conducive to new development.

“We don’t have any information to correlate the two,” Dees said.

Hearings on the budget bill are scheduled this week in the Senate, and Sen. Bert Stedman said he expects the final bill to top $2 billion after a last minute, $200 million request from the Department of Transportation.

“A lot of folks around the state, organizations, recognize that it was the state stepping in and pushing capital projects and stimulating our state economy that kept us from this economic molasses that has hit the Southern 48,” said Stedman, co-chair of the Senate Finance Committee.

The current proposed capital budget includes a myriad of projects ranging from infrastructure development to facilities maintenance, and Stedman said the focus on infrastructure growth would carry over into 2012.

Capital budget big ticket items include $25 million for renewable energy projects, $20 million for the Port of Anchorage expansion, $20 million for a Port MacKenzie Rail Expansion project and more than $50 million for water and wastewater infrastructure improvements for rural Alaska.

The proposed budget also focused closely on education, allocating more than $28 million for K-12 school renovations in Quinhagak and roughly $8 million to renovate the Pitka’s Point K-8 school.

If passed, the budget would also appropriate more than $25 million to the Alaska Housing Finance Corporation’s weatherization program.

“I think the public is in support of building our infrastructure,” said Sen. Lyman Hoffman, Finance Committee Co-Chair. “I can remember when we had under $200 million capital budgets but there are a lot of needs out in the state and we’re seeing that at the finance table.”

House Bill 118 would provide the annual corporate tax credits for qualifying research and development costs, including oil and gas exploration and production.

The original language stipulated the names of qualifying corporations would be disclosed along with tax credit amounts. After passing through the House Labor and Commerce Committee, however, the bill was amended and the disclosure requirements were deleted.

“I think you’ll find that in fisheries, you’ll find it in the oil industry, you’ll find it just about everywhere,” Olson said. “Now whether it’s a question of right or wrong, I can’t answer that.”

Critics claim the move would only keep Alaskans in the dark about the state’s rapidly changing oil and gas industry and represent a step backwards in the push for transparency, and questioned the timing of the disclosure amendments.

Olson, though, said keeping tax credit information confidential was standard practice throughout the country.

Rep. Craig Johnson, another supporter of the bill, said he worried disclosure laws, no matter how lenient, would only discourage production in the highly competitive resource industry.

“It is very confidential,” Johnson said.”We’re trying to entice people to come to the state to do this research, and if the first thing they have to do is disclose that they’re coming to do the research, that might be a tip off to their competitors.”

The bill is still under review by the House Finance Committee

The final budget was roughly $16 million less than Gov. Sean Parnell’s original proposed budget, and would be more than 30 percent funded by federal dollars.

“We took the Governor’s budget proposals, they adopted some, denied some, tough choices,” said Rep. Bill Thomas. “We don’t know what the consequences will be of that but I support every movement and action they did.”

The House also rejected four proposed amendments in the hours leading up to the final vote, including a $2 million appropriation for statewide pre-kindergarten education development and a $1.1 million appropriation to encourage Alaskan students to pursue in-state post-secondary educations.

Rep. Max Gruenberg said the additional funding for post-secondary support programs would be entirely federal, and urged lawmakers to embrace the “free money.”

“I think it’s important that we not deny the student’s use of these programs and that we not deny the limited federal funding that is available,” Gruenberg said.

Rep. Tammie Wilson spoke out against the proposed amendment, and said it would potentially require a 66 percent state match.

“We should not begin new programs that are not proven to be effective,” Wilson said.

A slight seven percent increase from the 2010 budget, legislators said spending focused specifically on K-12 education, as well as allowances for increasing health care and employee pension costs.

The budget now goes to the Senate for final review and vote.

“Building a budget is hard work,” Thomas said. “Trying to constrain spending is even harder in a time that we have lots of surplus, or what people think is a surplus, and we’re concerned about the future.”