Success Stories

Risky tradeoffs


Problem: A small rural community was facing both quality and quantity issues with its water system. Many alternatives had been proposed, but all involved either significant operational risk (e.g., the water quantity problem might not be solved) or significant cost risk (e.g., up to two times Class C estimates).

Challenges: Tradeoffs are difficult.  Tradeoffs in the face of significant uncertainty are even more difficult. The cheapest solution was to recondition the existing well and add treatment technology to address the water quality problem.  However, the well logs showed a disturbing trend of decreasing recharges with each freshet.  The cheap solution might mean a dry well in a few years.  A less risky alternative was to connect to the water system of the nearest municipality.  However, there was serious uncertainty about the cost of running a water line over a long distance with variable terrain.  What the decisions makers needed was a crystal ball.

Process: We worked backwards from a willingness-to-pay framework.  We asked: How much would the community be willing to pay above and beyond the cheapest alternative in order to go with the lower-risk pipeline alternative?  If the cost difference was within an acceptable range, we would suggest the more expensive alternative.  If, however, the community was not willing to pay the difference for the less-risky alternative, they would have to cross their fingers and hope they were not facing the same decision a few years later when the well ran dry.

We created a Monte Carlo simulation of the net present cost of each alternative to capture the main sources of uncertainty.  The model included distributions to model grant funding, land acquisition costs, plus all capital and operating costs.  Some alternatives were well understood in terms of cost.  Others, such as drilling a new well, installing novel treatment technology, and running a pipeline through challenging terrain involved huge unknowns and were modeled with asymmetric (long-tailed) distributions.  Shared factors, such as effective interest rate and inflation were also modeled probabilistically given the very different cash flow patterns of the alternatives over a long time horizon.


Results: The simulation results provide 90% confidence intervals on the cost difference between the low-cost and low-risk alternatives.  The expected cost difference was substantial and the community was unwilling to pay for the lower-risk alternative. This analysis effectively ended support within the community for the pipeline option.  However, it also opened the door for a mid-cost, mid-risk compromise in which a new deeper well was drilled and much of the existing infrastructure was retained.  The novel treatment technology for the “new well” alternative proved to be extremely problematic, but these costs were already factored into the probabilistic model. Decision makers committed to a course of action with a good sense of the range of outcomes beforehand and thus were in a good position to tradeoff cost and risk.

Rural community plan

Problem: A rural community was long overdue for an update to its Official Community Plan (OCP).


Background: The area consisted of several upscale neighborhoods on the fringe of a municipality.  The largest and oldest of these was developed as part of the Veterans Land Act in the 1950s and was characterized by large lots (for growing fruit) and distinctive, mid-century modern architecture.

Challenges: Unfortunately, this business model—returning veterans supplementing their income with small-scale fruit sales—had long ago ceased to be realistic.  What remained was a largely homogeneous neighborhood consisting of older houses on large lots with aging infrastructure and few amenities.  A recent trend among new residents was to use the large lots for semi-industrial purposes (e.g., storing large equipment) and to push for infill densification.  The community was thus highly polarized, with traditionalists favoring the existing “rural ambiance” and the newcomers favoring the highest and best use of the land.

Process: Given the obvious polarization in the community, our primary objective was to better understand the preference landscape in order to find potential paths for compromise.  We used multiple methods, including small panel workshops, open houses, and surveys (web-based and mail-in) to elicit a comprehensive set of problems and opportunities.  Then, through a careful facilitation process, we structured the primary themes that emerged from the community into a small set of future scenarios that residents could evaluate both qualitatively and quantitatively.


Results: Significant geographical and demographic differences in preferences emerged during data analysis.  These differences guided planning and engineering staff to develop a plan for pocket densification that allowed the historic parts of the neighborhood to protect their rural ambiance while encouraging high density development in specific areas.  These developments would fund a significant portion of the critical infrastructure required by the whole community, so the compromise was seen as acceptable by both sides.  Despite the initial polarization, the solution devised by local government staff based on the structured consultation moved through the public assent process quickly and without major modification.

Wild horses


Problem: Several hundred horses owned by members of the Penticton Indian Band (PIB) were roaming in residential neighborhoods and adjacent to Highway 97.  The horses posed a serious safety risk and were responsible for significant property damage, including fences, irrigation systems, and gardens.

Background: In the past, the Canadian Pacific Railway had maintained fencing between its tracks and PIB range lands, effectively excluding the horses from residential neighborhoods.  But, once the trains stopped running in the 1980s, the fences fell into disrepair.  At the same time, raising horses became less profitable for members of the PIB and the herd became effectively wild.  Years of tense relationships between the Penticton Indian Band and adjacent communities resulted in acrimony and inaction.  All the while, the herd was growing.

Challenges: Adjacent communities had no legal jurisdiction over the horses.  Provincial right-to-farm legislation suggested that the only solution was for neighboring communities to fence the entirety of the PIB reserve.

Process: Rather than jump to potential solutions, we conducted two multi-round Delphi surveys.  The first was to elicit fundamental objectives from the community.  The assumption within the local government was that non-PIB communities would be unwilling to pay for any solution.  However, a different set of priorities emerged during the three rounds of the consultation exercise.  Instead of being primarily cost sensitive, local residents reported being much more interested in (a) the durability of the solution, (b) humane treatment of the horses, and (c) maintaining and improving relationships with the PIB.  Cost minimization was an important objective, of course, but it was not the primary objective of most participants.  A second multi-round Delphi was then run to elicit potential solutions from residents and other stakeholders.  The purpose of the second round of surveys was not to evaluate alternatives, but to generate a complete set by drawing on the experience and creativity of citizens and other stakeholders.  After all, planning and engineering staff within the local government had virtually no experience with this kind of problem.


Results: The panels for both surveys was kept to 50-60 participants.  However, the total number of ideas, justifications, comments received during the process exceeded 1,400.  Overall, the results of the survey gave the local government a strong mandate to move forward on a solution that satisfied the most important objectives.  However, the transparency, inclusiveness, and comprehensiveness of the public process, combined with the strong support that emerged within adjacent communities for the traditional rights of PIB members and the well-being of the horses changed the adversarial stances that had evolved in response to the problem.    Ultimately, the PIB took it upon itself to insist on better range management practices from its members and the problem virtually disappeared.

Troubled water system


Problem: An aging water system administered by an irrigation district was on the verge of collapse.  Two referenda authorizing infrastructure repairs and improvements had failed so the irrigation district board voted in frustration to disband and transfer the system to a local government.

Challenges: The water system, with fewer than 400 properties, was facing significant upgrade to meet the health authority’s drinking water safety guidelines.  Some in the community favored an ultra-violet treatment system while others wanted the adjacent City of Penticton to take over the water system.  The debate between the two camps had become increasingly acrimonious.  Penticton, for its part, was not keen and was contemplating significant administrative surcharges to take over the system.


Process: Through public consultation we were able to go beyond specific technologies and alternatives and determine residents core concerns: safe water, low cost, and continued independence from the City of Penticton.  Our approach was to devise a dominant solution (an alternative best along each of these three dimensions).  To do this we had to construct economic models of each alternative even through each alternative had very different patterns of cashflow and uncertainties.  We then proposed to the City of Penticton that they supply bulk treated water for the same lifecycle cost as a new UV treatment plant.

Results: After winning the support of 86% of ratepayers in a referendum, a bulk water agreement was signed with the City of Penticton.  Water quality improved dramatically, economies of scale were realized, and community autonomy was maintained.