Jerry's Statement

To: CBAPOA Property Owners
From: Jerry Sullivan
Subject: The reasons that I recommend voting no on all three ballots

Ballot to Remove Me as A Director

1) Breaching fiduciary duty by not validating EIN of the association nor ensuring legally required filing of yearly tax returns.

As stated previously, the CBAPOA EIN # 74-*****51 was issued on 06-14-77. When issued, the IRS position was that the number never expired. When the IRS site was checked in September of 2024 on this issue, the information available was that the EIN # doesn’t expire. I was not aware that the IRS updated their position in November of 2024 stating that EIN numbers will expire if there is no activity over a period of years.

I did not ensure that yearly tax returns were filed during my terms as board chairman because there were no taxes due. My belief at the time was that if no taxes are due and the association was below the $50,000.00 receipt of funds, no filing was necessary.

2) Conflicts of interest by charging the association through his personal business for services rendered as volunteered.

I volunteered my time. I volunteered to forgo making a profit on my company’s operators, technicians and equipment on the High Line Road culvert replacement and retaining wall repair and the Ramp Road culvert replacement projects.

What is not mentioned is that I volunteered my and my company’s time, personnel, equipment, and concrete jersey barriers to replace the culvert on Camp Branch Road. The only cost to CBAPOA was purchasing the culvert.

Additionally, I volunteered my and my company’s time, personnel, equipment and materials to install a culvert on Lake Side Circle near Kelle Harrell and Cody Hahn’s residences to facilitate drainage. This work was performed at no charge to CBAPOA.

On a regular basis over the past 24 years, I have used my company’s equipment to perform road repairs without charging CBAPOA.

Whenever I charged for my company’s personnel or equipment on projects for CBAPOA the board members knew in advance of my ownership in ENSOURCE CORPORATION and agreed to pay for the work that ENSOURCE would be charging to perform. This was always at a better price than could be obtained from another contractor.

3) Ethical misconduct for submitting false resale certificates without properly filing for tax exemption status with respective government agencies.

When I contacted Texas Corrugators, Inc to fabricate a culvert for the Camp Branch Road culvert replacement project, I was asked if CBAPOA was tax exempt. I stated I was not sure that we are a POA and do not make a profit. I was advised that Texas Corrugators would send me a Sales and Use Tax Exemption Certification form to complete and return and no taxes would be charged. I did this and didn’t think any more about it.

Since this was brought up, the State of Texas has been contacted and the situation was explained. The person contacted asked who made the purchase, when this purchase was made, how much the purchase was and why we were asking these questions. The situation was explained and the response was: due to the time that has passed and the minimal taxes that would be due, this is not a concern of the state of Texas. The state of Texas representative agreed to send a letter stating their position on this issue. This letter will be shared with the association when received.

If anyone has any questions regarding the things I have done over the past 25 years for this association, please contact me to discuss. Some of the people making accusations against me didn’t live here when these activities occurred.

As I have stated previously, I have served the CBAPOA in various functions over the past 24 years. I have always done what I think is in the best interest of our community. I have made some mistakes and have admitted when I have done so.

In my opinion none of these accusations are sufficient to remove me as a director.

Ballot to Remove Charlene O’Brien as A Director

1) Misuse of funds by not turning receipts for reimbursement in a timely manner (18 months) for verifiability.

There are no requirements in the CBAPOA by laws stating that receipts for reimbursement must be submitted by a certain time to be validated and paid. When Charlene submitted the receipts, they were validated and approved by the board for payment. A person at the last board meeting stated that corporate policy requires that receipts submitted for reimbursement must be submitted in a specific time to be paid. I worked as a vice president for (2) two fortune 500 firms and have been an owner/vice president of ENSOURCE CORPORATION. In all (3) three companies we have paid verified receipts when submitted. So, there is no specific corporate policy for corporations or associations. There was no misuse of funds.

2) Prioritizing personal interests by submitting IRS request to deactivate/cancel valid EIN without verification and/or board notification or approval.

I know Charlene has worked many hours trying to determine the Status of the original EIN number issued by the IRS on 06-14-1977 and the new EIN number requested by Kelle Rahm and Kelly Harrell without verification and/or property owners or board notification or approval. Charlene has received conflicting information from the IRS, members of other associations, bookkeeping professionals, as well as Kelle Rahm and Kelly Harrell. I know Charlene will be happy to answer any questions you may have regarding this issue.

3) Breach of fiduciary duty for failure to verify the validity of any and all EIN/Tax ID information timely and accurately.

This is essentially the same as 2) above.

In my opinion, none of these accusations are sufficient to remove Charlene O’Brien as a director. She works hard and is trying to do what is best for our association.

STATUS OF THE ASSOCIATION AS UNINCORPORATED ASSOCIATION OR NON-PROFIT CORPORATION

I recommend voting no, I do not wish for Camp Branch Acres Property Owners Association to remain a NON-PROFIT CORPORATION.

My recommendation is because the ballot information that was provided is riddled with inaccuracies. In my opinion the association should be an Unincorporated Nonprofit Association. Please read the attachments titled Why Remaining an Unincorporated Nonprofit Association is Best for Camp Branch Acres and Nonprofit Unincorporated Associations vs. Nonprofit Corporations: Choosing The Right Corporate Structure.