The Pinehurst Village Council grudgingly agreed Tuesday to spend $31,000 to replace rotting windows and awnings at the historic Fair Barn.

The council approved a budget amendment at its work session to transfer $40,000 from contingency to capital outlay to pay for repairing and replacing the windows, awnings and parts of the loft in the 100-year-old building.

The damage was the result of poor design of the millwork windows that allowed water to pool, which caused the wood to rot, plus an undiscovered infestation of pine borer beetles. The beetles bored holes allowing more water to get into the wood.

Insurance won't cover the work, the council was told. Assistant Manager Jeff Batton later said that the village attorney had deemed it unfeasible to try to recover financial damages from the contractor, because "you would have to prove someone had knowingly provided you with materials they knew were defective."

The pine beetle larvae, invisible to the naked eye, were apparently inside the wood when a contractor installed the milled windows, which are characteristic of the era when the Fair Barn was built, Batton said. When they matured, they bored holes through the inside, creating more openings for water to seep in, he said.

The then-Pinehurst Historic Preservation Foundation (now the Village Heritage Foundation), a nonprofit organization, raised money privately for the restoration and renovation of the Fair Barn. It contracted out the work.

The group later transferred ownership of the Fair Barn to the village for use as a public facility. The Fair Barn is at the Pinehurst Harness Track, which the village also owns.

The village makes some money from renting out the Fair Barn for public and private functions, such as parties, receptions, weddings and plays.

"No one could have predicted the wood rot and beetle infestation problem," Batton said in a later telephone interview.

Paint on the exterior disguised the infestation problems, he said. The first sign of a serious problem came when Fair Barn Manager Meredith Sihol attempted to hang something on the awning and it partially crumbled. There had been a chronic problem of water leaking in around the windows, he said.

The village has an employee who inspects all municipal buildings and other property, as he has time, to determine when maintenance and repair work is needed, Batton said.

Employees constantly caulked around the windows to stem the leaks, which didn't work, said village Parks and Recreation Director Mark Wagner.

The windows and the awning were installed before the village became directly responsible for the structure, Batton said.

The contractor who finished the Fair Barn for the village was John William Brown and Co., which "did a fine job," Batton later said.

Mayor Pro Tem George Hillier, a retired insurance specialist, urged that the maintenance program must be kept up in other cases, to make sure insurance will cover replacements or repairs to other buildings.

The repair work also includes adding new copper flashing and reangling it to direct water away from the windows to prevent it from pooling and rotting the wood and replacing some boards in the loft, according to a memo from Wagner to Assistant Manager Natalie Dean, who is in charge of finances. Some windows may have to be replaced.

About $9,000 is needed for removing a wall to create a larger workspace for two employees in the front office.

An exterminator will be brought in, and the wooded areas will be inspected and treated as part of this, he said.

"We pay now or we pay later to get it fixed," said Councilman Doug Lapins.

Also Tuesday, the council adopted a revised fee schedule, effective Jan. 1, 2007, that includes a new policy to charge a fee for reserving the lawn area at the Arboretum for events such as weddings and concerts.

The fee is similar to one charged for the Harness Track events and comparable to those charged at Weymouth Center in Southern Pines, according to a memo from Dean. Deposits are required for the Arboretum and the Harness Track reservations.

The money will help offset the expense to the village taxpayers of maintaining these facilities, she said.

Additional minimum fees of $50 per inspection by different building trades were added for residential property, and $100 for nonresidential property.

The council also adopted an assessment roll for repairs to the dam on Pond 1 in the Municipal Service District. The village is splitting the $500,000 repair bill with the 22 property owners in the district.

Sara Lindau can be reached at 693-2473 or by e-mail at slindua@thepilot.com.