Bylaws can be tricky things. Reporting from The Runner’s Claudia Culley highlights a roadblock in the pathway to a new student union building at Kwantlen Polytechnic University. Unlike most other student associations, KSA’s bylaws have a weird quirk. They require that if the organization is to issue a debenture for the purposes of debt, i.e. any unsecured loan, that the debenture be approved by their members. And unlike many other student associations, a referendum at Kwantlen just won’t do. Debentures require a special resolution, which can only be discussed at a general meeting. And it appears to have been this way since at least 2006.

Herein lies the problem. As reported by Ms. Culley, the general meeting on the 31st of March did not reach quorum for the purposes of special resolutions, which is actually a different level than needed for special resolutions (thankfully it wouldn’t have needed to reach a third quorum for bylaw changes).

This unusual reliance on in-person approvals seems to have stemmed from the organization’s incorporation under the Society Act of British Columbia in 1981. Interestingly, that restriction also now seems to be deprecated, and while organizations can have rules restricting the Board of Directors from issuing debentures on their own, they no longer are obligated to keep those clauses in their bylaws.

Kwantlen and any other affected student association should probably consider updating bylaws, the function of borrowing money for operations in the student association context is one probably best left with Boards of Directors. But that isn’t in the cards for KSA until at least their next general meeting.

So for KSA? If they want to move forward they might have a saving grace. Now that the changes have been made to the act, its worth exploring clause 1 of their 18th article [emphasis mine]:

In order to carry out the purposes of the Society, Council may, on behalf of and in the name of the
Society, raise or secure the payment or repayment of money in the manner they decide and, in
particular, but without limiting that power, by the issue of debentures.

So while debentures are still off the table, they might be able to do a secured loan instead of a debenture (though the definition of debenture in BC law is a bit befuddlingly broad to myself as a non-lawyer). Whether that counts as an instrument “issued by the corporation” is something for lawyers to determine, but it is a path forward.

So what to secure it with? While their own unrestricted reserves are only $2 million dollars, they might be able to get around their debenture issue by getting a loan guarantee from the university on a secured bank loan. Revenue streams by instituting a fee are predictable enough for a university when fees are mandatory, and critically, fee changes at KSA can be passed by referendum. Or they could just manage to get 100 people to show up to a general meeting. Whether getting students to show is easier than getting a university loan guarantee—that’s up to them to judge.