Ashland Community Development Department Director Bill Molnar accepted a free scenic airplane ride over Ashland and Crater Lake from Mark Knox, a local land use consultant who frequently represents clients with planning applications reviewed by the department, city officials said.

Ashland Community Development Department Director Bill Molnar accepted a free scenic airplane ride over Ashland and Crater Lake from Mark Knox, a local land use consultant who frequently represents clients with planning applications reviewed by the department, city officials said.

The plane was owned by Jon and Esther Phelps. The couple are proposing to build a lodge-style restaurant on Winburn Way, across from Lithia Park.

Molnar, who took the airplane ride on July 4, 2009, with his wife and son, did not know at the time that the Phelpses owned the plane, Mayor John Stromberg said in a statement that was posted to the City Council's publicly accessible e-mail message board on Wednesday afternoon.

Knox submitted paperwork for the restaurant proposal to the Community Development Department on Aug. 17, 2009 — six weeks after the plane ride. The Phelpses' names were not on the application at that time, Stromberg's statement said.

On Feb. 14 of this year, Ashland City Councilors and Stromberg became aware of the plane ride after receiving an e-mail from a concerned person who said that Molnar may have been improperly influenced by the Phelpses because he went on the plane ride.

"Members of the Council and the Mayor take this matter seriously," Stromberg's statement said. "We immediately forwarded the email on February 15, 2011, to the City Administrator and she investigated the concern."

On Feb. 15, City Administrator Martha Bennett removed Molnar from working on the restaurant application, and Molnar concurred with that decision, Stromberg's statement said.

Molnar wrote a letter to the State Ethics Commission Director on Feb. 22, describing the plane trip, the restaurant application and the chronology of events, and requesting an opinion about whether state ethics laws were violated, according to Molnar and Stromberg.

Molnar asked whether the plane trip constituted a gift under Oregon law, Stromberg's statement said.

Molnar said on Thursday that he has received confirmation that the ethics commission received the letter. He said the commission may ask for additional information as it checks into the matter.

As a precaution, Molnar researched the cost of hiring a plane for the same scenic trip and has paid the Phelpses that amount, the mayor's statement said.

Molnar declined to say on Thursday how much money he gave the couple.

Skinner Aviation, which is based at the Ashland Municipal Airport, charges $180 for a scenic tour over Crater Lake in an airplane that holds three passengers.

The charge is $750 for an airplane tour in a plane that carries up to five passengers, a company representative said.

Bennett, the city administrator, investigated whether Molnar had violated city ethics rules regarding gifts and favors given to elected, appointed and staff officials by people who have a financial stake in city decisions, Stromberg's statement said.

"The City won't be able to release information about what she did because the remedy for violations is disciplinary action, which is confidential," the statement said.

Molnar declined to say whether disciplinary action has been taken against him, and if so, what action.

He said personnel issues are confidential.

The city's ethics rules are generally considered to be more stringent than state ethics rules.

Knox formerly worked for the city's community development department for a decade before striking out on his own as a land use consultant several years ago.

Molnar said he and his family have been friends with Knox and his family for years, dating back to when they both worked for the department. Molnar rose to become director of the department after Knox's departure.

Molnar was promoted to the director's post in 2007 after working for the department for 20 years.

The two families have a long-standing tradition of getting together on the Fourth of July to enjoy events like Ashland's annual parade, Molnar said.

"It's an issue for long-standing friends in a small town that their professions overlap," he said.

He added, "It's something that is a challenge and the public deserves to know how that's handled."

Molnar said he received a call from Knox inviting him and his family to go on the Fourth of July plane ride in 2009. Molnar said the two families went together.

"At the time, I didn't think anything of the matter," Molnar said.

The issue of the plane trip will not legally affect the restaurant proposal as it winds through the planning process since City Councilors and the mayor are the decision-makers — as long as they have an open hearing on the proposal and can be objective regarding the application, according to an opinion from Interim City Attorney Megan Thornton.

Councilors have already had public meetings to consider the restaurant proposal and will have another one on April 5. They have praised some aspects of the proposal, voiced concerns over other aspects and heard from members of the public who both support and object to the restaurant.

Staff writer Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.