The Jacksonville Arena* is a privately owned and financed multi‐purpose entertai

The Jacksonville Arena* is a privately owned and financed multi‐purpose entertainment and sports arena. The arena is 500,000 square feet and has an 18,000‐seat capacity. The arena was built to host major concerts, ice shows, trade shows, monster truck rallies, circuses, and sporting events. It has NCAA/NBA/NHL‐ready core features to support collegiate tournaments and potentially a professional sports franchise. While it attracts enough events to remain solvent, the arena has not attracted an anchor tenant and revenues for the current year are not reaching projected goals. Therefore, the operating budget for the arena must be cut.
Your task is to take the Arena’s budget and, abiding by some restrictions (see below), revise it so that a 6.5%
reduction is achieved.
You will turn in two files.
1. Excel File that shows an accurate current budget, proposed budget, and changes to each account
2. Word Document (see template below) that explains the following:
a. The steps you proposed to reduce the budget by 6.5% (Give specific $ amounts and categories).
b. Your reasoning/justifications behind your decisions to reduce specific parts of the budget.
i. This should include specific sources to support your decisions ii. Every account you adjust requires a separate justification explaining both why you believe the account can be cut as well as support for the amount being cut (that it is not just arbitrary)
c. A reflection (no more than 300 words) about the strategy and ethical dilemmas you faced when reducing the budget by 6.5%.
Notes for Budget Reduction Project:
1. Fringe benefits are based on salary amounts. Total Fringe is 33.5% additional funds based on salary amounts for full-time staff (11.5% for part‐time). If you reduce salaries or salary lines, the fringe benefits should also be appropriately reduced. So take this into consideration when you are reducing the budget.
2. You may not reduce by a % or stock dollar amount “across the board” for multiple accounts. For example, you cannot just cut multiple accounts by $5,000 or $10,000 (or 10%, 25%) without clear justification for those amounts.
3. You cannot use a Pro forma budget (a hypothetical or stock budget) from another arena to just pull numbers from. You may use other budgets for guidance on specific line items but must include calculations based on differing realistic assumptions comparing facilities.
4. Be mindful of examples that suggest long‐term savings rather than short‐term budget cuts. The goal of this assignment is to make short‐term operational cuts to the budget. Investments in technology to reduce utilities or other costs may be appropriate, but capital investment costs and short‐term budget effects (vs. long‐term savings) must be accounted for.
5. The Jacksonville Arena is required by state law to carry at least $100 million in general liability insurance coverage annually (which includes Liquor Liability). The current cost of this policy is included in the insurance budget account and accounts for 90% of the current insurance budget.
Current Budget Details
1. Personnel/Salaries
Full‐Time
The following is the list of the 46 full‐time staff and the current salary for each position.
Position Number of Staff Salary
General Manager 1 $160,000
Assistant General Manager 1 $115,000
Executive Assistant 1 $45,000
Receptionist 1 $30,000
Director of Finance 1 $85,000
Comptroller 1 $65,000
Staff Accountant 2 $42,000
HR Manager 1 $50,000
Director of Ticketing 1 $72,000
Ticket Office Manager 1 $60,000
Ticket Office Supervisor 1 $45,000
Director of Marketing 1 $87,000
Public Relations Manager 1 $60,000
Social Media Manager 1 $50,000
Premium Seating Manager 2 $40,000
Group Sales Director 1 $45,000
Account Executive 2 $30,000
Senior Event Manager 1 $65,000
Event Manager 2 $47,000
Event Coordinator 1 $35,000
Production Director 1 $65,000
Production Coordinator 2 $45,000
IT Manager 1 $60,000
Director of Security 1 $63,000
Security Manager 2 $45,000
Director of Operations 1 $101,000
Asst. Director of Operations 2 $60,000
Administrative Assistant 1 $35,000
Conversion Manager 1 $40,000
Conversion Supervisor 2 $30,000
Maintenance Technician 3 $31,000
Housekeeping Manager 1 $42,000
Housekeeping Supervisor 2 $32,000
Housekeeper 2 $27,000
Part-Time
The following is the breakdown on part‐time staffing for the arena. Weekly expense represents the total amount per week per position in each category. For example, the arena pays $672 each week for one ticket seller position. Personnel category is the number of positions (i.e. 1 part‐time security
position for 24 hours per day might be filled by 4 individuals, each working a 6 hour shift per day)
Pay Rate Personnel
Weekday
Hours (per
day)
Weekend
Hours (per
day)
Weekly
Expense per
1 position
(hours x
days)
Total
Weeks
Ticket Seller $12.00 4 8 8 $672 45
Guest Services $9.00 2 8 8 $504 51
Operations $9.00 4 8 8 $504 50
Security $12.00 1 24 24 $2,016 50
Custodial $8.00 2 6 5 $320 51
2. Contractual Services
Account Amount
Equipment Rental $50,000
Landscaping $31,000
Legal $26,000
Maintenance Services $110,000
Pest Control $40,000
Photography/Design $11,000
Plumbing $24,000
Staff Uniforms (and Laundry) $16,000
Waste Removal $65,000
3. Internal Services
Account Amount
Carpentry/Painting $11,000
Ice Maintenance $60,000
General Repairs/Maintenance $55,000
HVAC Preventative Maintenance $105,000
4. Equipment/Supplies
Account Amount
Equipment Expenses $55,000
Building Supplies $50,000
Electrical Supplies $25,000
General Supplies $45,000
5. Utilities
Account Amount
Arena Utilities $1,050,000
Office Utilities $67,000
6. Marketing/Promotions
Account Amount
Advertising $115,000
Customer Relations $35,000
Promotions $60,000
7. General/Administrative
Account Amount
Automobile Expenses $15,000
Background Checks $9,000
Bank Fees $30,000
Computer/Software $100,000
Credit Card Fees $46,000
Dues/Subscriptions $25,000
Human Resources Recruitment $25,000
Insurance $212,000
IT/Internet $45,000
License/Permits $13,000
Office Supplies $30,000
Postage/Shipping $20,000
Professional Fees $75,000
Staff Training $30,000
Telephone $53,000
Travel & Entertainment $18,000
Miscellaneous $9,000
Jacksonville Arena Budget Reduction Report
PRT 466 – Summer 2022
Student Name
Date
PLEASE NOTE THAT EVERYTHING WRITTEN IN RED ARE MY COMMENTS AND SHOULD NOT BE INCLUDED
IN YOUR REPORT
1
Table of Contents
Executive Summary ……………………………………………………………………………………………………………………… 2
Justifications ……………………………………………………………………………………………………………………………….. 3
Utilities …………………………………………………………………………………………………………………………………… 3
General/Administrative ……………………………………………………………………………………………………………. 3
Reflection …………………………………………………………………………………………………………………………………… 4
2
Executive Summary
Write a brief (no more than 1‐2 paragraphs) summary of your overall report here. Be sure that the
Executive Summary covers the entire report. Use subheadings and charts/tables as appropriate.
3
Justifications
[In this section, you will include a summary of each of the adjustments made to each account] Be sure the break out each Object Classification and Account as a separate sub‐heading.
Utilities
The following accounts were adjusted in Utilities [Example text]
Arena Utilities (Reduced by $220,000)
Through research, I found that Municipal Arena had a problem with their utility budget. They had only budgeted for $700,000 and needed approximately $1.2 million to cover utilities. With this stadium seating 25,500 people and having square footage of 470,400 sf, we can conclude Municipal Stadium is similar to our stadium. While our current budget is $1.6 million dollars for arena utilities, we should be able to reduce the Arena Utility budget by $220,000 to $1.38 million, which still provides a 15%
contingency in the event utility trend higher.
https://journalstar.com/news/local/govt‐and‐politics/jpa‐money‐will‐put‐stadium‐ budget‐in‐the‐
black/article_4ed7847c‐7be4‐5c6b‐8336‐4dd63c0cceef.html
https://www.municipalarena.com/about
Please note that this section is completely made up, but represents what the process might look like in researching both an account rationale and support for the appropriate estimate of an amount to be cut
General/Administrative
The following accounts were adjusted in General/Administrative
Telephone (Reduced by $16,000)
We budgeted $130,000 for telephone services. I believe we are overpaying for these services and can utilize a cheaper alternative. By switching to Spectrum Business we can cut our costs on these services to $114,000 per year. Spectrum Business offers a bundle of 500 Mbps internet for $64.99 a month plus
$29.99 phone services per line per month. Assuming that we need approximately 100 phone lines for the arena (based on 50 full‐time employees + additional lines for sales and media as an estimate obtained from direct communication with PNC Arena general manager Mr. Davin Olsen). This switch will save our company $16,000 in expenses.
business.spectrum.com/bundles
Davin Olsen, personal communication, January 31, 2019, Please note that this section is completely made up, but represents what the process might look like in researching both an account rationale and support for the appropriate estimate of an amount to be cut.
4
Reflection
Here you would write your 300-word reflection
Your reflection should describe your overall philosophy that guided your approach to reducing the arena budget as well any ethical issues you faced with making specific decisions and difficulties faced in the process. Times new roman 12-point font. Can you please complete both the excel file as well as the word document please and thank you.

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