Sports venues are built to be used by the attendees and promoters they serve. The more events that are booked and the more attendees who attend those events, the earlier the venue and its equipment will wear out. Regardless of the effectiveness of the preventative maintenance program, equipment has a limited lifespan. Planning ahead for such inevitable replacement is an important role of the operations department. A plan to schedule such maintenance is called a capital replacement plan. In order to prepare for these expenses, venue management usually establishes a reserve or replacement fund which is funded annually with an amount equal to 3-5% of the operating budget.

Using the list of issues on the attached scenario:

a. Create a prioritized list of capital replacement items, with the most important listed first. Your list will be used in determining how to allocate funds available in the capital improvement reserve fund.

b. Provide a justification for each item on your prioritized capital replacement list regarding its importance and/or its ranking on the list.

Of course, find that academic article to support your maintenance plan schedule decisions.

Scenario The GM has asked for your recommendation on this budget request this arena has a $2 million annul budget wilh 2% ser aside for capital expendilures In this particular venue, single item purchases ove $1,000 are classified as rapilal expenses, approximately ten years old and many routine maintenanc crojects have been deterred due to limited rescurce. allocalions. The following items need atlention: - HVAC air handler fans need to be either replaced or rebuilt. There are four thal need immediate attention. Cost lo rebuild each fan is $700 and comes with a nne-year parts warlanty. A new fan is $1,500 and comes will a two-year labor and five-year parts warranty. - The ice system compressor does not have an alarm system to alert you of a coolant leak. Employees feel that they should have a system to alert them if there is a significant leak as this could pose a health risk. Not all venues with coolant systems have an alarm. The alarm costs approximately $3,000. - L load-in for this venue requires moving a seating section, called a seating "plug," each time you host a special event. The plug was not originally designed to be lifted to accommodate the two-inch rise onto the ice and over time this has stressed the seating plug causing the plug frame to crack. The approximate cost to replace the plug is $15,000. Production employees have brought to your attention that several overhead trusses do not have a fall-arrest system for the riggers. The riggers feel this is a salety issue and have asked you to address the situation. The approximale cost to complete the fall-arrest system is $8,500. - The carpet in the hallways leading to the locker/dressing room and the carpets in the locker/dressing room itself are totally worn out. Additionally, the lobby carpet and elevator carpel are badly worn. Approximate cost for replacement is $20,000. - The walls and stall partitions in all of the venue's sixteen restrooms need to be repainted. The approximate cost per room is $800 for a total of $12,800. - Though the venue meets code, under certain circumstances lighting for stairway aisles is marginal and you've recently had more than one guest trip and fall. You are aware that another arena has a pending lawsuit related to a fall from a similar lighting issue. Upgrading the slairway lighting will cost approximalely $25,000