Boom - Bust - Repeat: How an innovative new planning methodology takes aim at breaking this cycle for Western communities

Varied Western Landscapes. Energy exploration continues to be a fixture of development in the West and debates over the cost-benefit of extraction approaches such as fracking continue. Many communities are questioning how long the current boom will last and how they will deal with the next bust. Image by Marc Diemer.

Varied Western Landscapes. Energy exploration continues to be a fixture of development in the West and debates over the cost-benefit of extraction approaches such as fracking continue. Many communities are questioning how long the current boom will last and how they will deal with the next bust. Image by Marc Diemer.

by Marc Diemer and Brian Wilkerson, Westminster, Colorado

The Western regional identity is as varied and storied as its landscape, shaped through a history of rapid and transformational change. While this identity continues to evolve, the frontier mythology of fierce independence and self-reliance endures, accompanied by a familiar story of economic boom and bust across the region. Historically, boom times were largely driven by opportunistic resource extraction, and the bust that followed was often due to the resource’s depletion or drop in commercial value. The declines came to be accepted – or at least expected – as part of some grand bargain with the land, an inevitable consequence of a resource-based economy.

Today, the Western region’s metro areas and remote communities alike are seeking economic diversity as a more sustainable strategy, hoping the next ‘bust’ in the cycle never comes. Yet, too often the development projects and initiatives that win favor are those that hold the most promise of near-term economic gains, while their long-term sustainability and impact on a host of other community goals is not known or even considered. Some remote communities have turned to gaming, and others are hopeful that increased oil & gas development will be the economic boost their community needs; however, it remains to be seen if these strategies can really sustain a vibrant economy over the long term. This prevailing “trickle-down” approach to planning seeks to maximize economic success and assumes that benefits to other community values and goals will follow, but this is not always the case, and this false assumption threatens to perpetuate the same old boom and bust cycle.


Varied Western Landscapes

The diverse landscapes of Western communities have focused on a number of economic development approaches from agriculture to resource extraction to downtown redevelopment and tourism. But many communities are still seeking ways to ensure a sustainable economy that doesn’t fall prey to the boom-bust cycle. Images by Marc Diemer.


In order to build community resilience and avoid cyclical economic busts, long-range planning decisions must address a host of common Western issues, including water resources, energy development, natural resources management, health care services in remote areas, and population growth in metro areas, to name a few. While Western metro-areas and remote, smaller towns may be wrestling with growth from different angles, this planning approach will help both determine the optimal portfolio of interventions that best achieves all goals, while avoiding undesired consequences, in the context of the constraints that they have.

Western planners and community leaders must be concerned with much more than near-term profitability in a few sectors, and realize that the health and resilience of our communities is determined by a broad spectrum of goals, both economic and non-economic. By placing non-economic goals first, the alternate planning methodology presented here allows the community to empirically determine what economic programs will help them achieve those goals, and treats achievement of health, cultural, social, and community goals as explicit (rather than assumed) outcomes of development.

At its heart, this new methodology aims to improve decision making. Planners and city managers can explore alternate development scenarios and investment choices, which could range from different projects to entirely different development approaches or philosophies. An example from current Western planning could be whether or not to allow fracking in a jurisdiction. The approach allows the community to compare the financial and non-financial impacts of this strategy in an apples-to-apples manner that leads to better consensus building among all stakeholders. This is because quantitative data is gleaned from qualitative information in order to gain a comparable understanding of each project and its benefit to a host of community goals and values.

For example, suppose a planning team was trying to determine the best use of a particular piece of land, and for the sake of a clear illustration, let’s assume the choices being considered are dramatically different. Projects being considered are the relocation of a corporate headquarters (bringing much-needed jobs) or the dedication of additional open space for trails, wildlife and flood control. Traditionally, the benefits to the community from the open space project would be hard to quantify, whereas the business use may readily provide a quantifiable account of its benefits by reporting proposed number of new jobs, impact on the city’s tax base, and so on. When the decision is based on a mix of quantitative and qualitative information, it is often the projects that promise a short-term economic gain that win favor. This is not to say that the economic success of a project is not a worthy and important goal – of course it is a key consideration. However, so too are a host of other goals that build a resilient and enduring community while honoring its comprehensive plan and long-term vision.

By only prioritizing short and mid-term economic success, leaders may be inadvertently putting their communities at risk for an economic bust and ignoring broader community needs. With this new approach, a thorough understanding of the impact of all projects and initiatives on all community goals and values is uncovered, thereby improving decision making.

The example above is simple enough because it outlines a situation involving an either-or-choice between only two projects. However, complicate the decision making and consensus building process with numerous alternatives and the need for a better approach becomes clear. This new approach, which was developed with a Small Business Innovative Research grant (SBIR) in 2010 from the National Science Foundation allows for the side-by-side evaluation of numerous projects, measured and prioritized against a host of goals and values. The approach generally includes four phases, described below.

While these steps may seem to follow somewhat of a standard planning approach, the details within each are what differentiates it from other models. The primary benefit of this model over traditional planning approaches is the insight it provides decision makers to the impacts and trade-offs of various investment choices, the associated ability to more quickly achieve consensus among often opposing stakeholders, and the powerful understanding of the long-term impacts on both economic and non-economic goals that the scenario analyses provide. And nowhere in the West is there a greater need for improved decision making with precious investment resources at stake than among Native American communities. In 2011, this approach was implemented with the Northern Arapahoe Tribe of the Wind River Reservation in Wyoming. The efforts to help the tribe make a concrete action plan to address a host of challenging economic and social issues illustrates the methodology’s phased approach.

Case Study: The Methodology in practice with The Northern Arapaho Tribe

Phase 1: Discovery

The 2.2 million acre Wind River Reservation is home to two tribes, the Eastern Shoshone and the Northern Arapaho, who have relied heavily on oil and gas revenue for more than 60 years. In more recent years, gaming was introduced and now four casinos are in operation. However, these industries along with some tourism have not lifted the community out of poverty; instead, it has left the tribes vulnerable to the boom and bust cycles associated with these industries. Moreover, these economic development efforts have focused on maximizing profits, while cultural advancement and other community ambitions have not been prioritized and have languished.

The first step towards improving the Tribe’s economic and social conditions was a discovery phase that determined community goals and values, constraints, and the subsequent measurements to evaluate proposed development projects and investment considerations. The goals, values and constraints factored in the approach are determined through a variety of methods, including stakeholder interviews, public workshops and the review of the community’s comprehensive plan. In the case of the Northern Arapaho, community-wide participatory goal setting workshops were also held to establish the Tribe’s most important goals. The community identified the following:

  1. Offset Tribal government expenses through Tribal Enterprises (revenue to Tribe)
  2. Provide Services to Tribal Elders
  3. Increase the variety of business models on the reservation
  4. Increase the housing options available to tribal members
  5. Increase the healthcare options available to tribal members
  6. Increase the health insurance options available to tribal members
  7. Increase broadband access for tribal members and businesses

The goals established covered a spectrum of community needs, from developing businesses and offsetting Tribal government expenses, to housing, healthcare and infrastructure. Interestingly, one of the key business goals was to achieve more diversity – an important consideration for a people that have lived through boom and bust cycles of energy production for decades. The goals allow insight into the community’s values and establish the measuring stick against which all proposed investment alternatives, including non-revenue generating investments, were evaluated.

Phase 2: Ranking and Scoring of Investment Alternatives

The second phase in the approach defines all potential interventions and projects; this is the community’s wish list, and it’s typically an ambitious and varied one. The list of development alternatives being considered by the Northern Arapaho were these:

  • Broadband services
  • Propane enterprise
  • Organic beef processing and distribution
  • Organic produce production
  • Eco/Ag educational visitor services
  • Drug Addiction Treatment Center
  • Health Clinic
  • Joint Tribal Clinic

Each project had merit and would serve a particular need; however, not all projects could realistically be advanced. Given constraints and the emotional investment by various proponents in the alternatives, finding a clear path forward is often a struggle for leaders. This is when the dispassionate evaluation of projects, measured against all goals, becomes important. An in-depth study of each proposed project was conducted to measure its likely impact on the full range of community goals and values determined. The evaluation criteria included the following:

  • Short and long term cost - benefit analysis
  • Resources needed
  • Probability of success
  • Job creation
  • Interdependencies/exclusivities/constraints
  • Influence of time and external factors

From here, measures were determined to consider the impact on each goal. This included the ranking and scoring of qualitative information in order to establish a quantitative measure. For example, an important goal for many Native American tribes is to increase sovereignty; not an easy thing to measure using traditional cost-benefit analysis techniques. However, by working closely with all stakeholders, each project alternative being considered is ranked and scored against the goal of increasing tribal sovereignty.

Phase 3: Scenario Modeling

At this point in the approach, all investment alternatives have been measured against the community’s goals and values in quantitative terms. This allows for the evaluation of literally hundreds of alternate scenarios using a sophisticated statistical analysis modeling tool that was built with NSF funding. The scenarios generated describe which combination of investment projects will best support the goals ‘demanded’ of the model, and in what percentages. For the Northern Arapaho Tribe, this meant running optimization scenarios that explored everything from “Maximizing revenue to Tribe with no negative impacts” to “Most positive impacts for elder services and healthcare.” The resulting portfolios detail which projects being considered should be included and at what percentages.

In addition to simply reporting which projects maximize any given goal or combination of goals, the model will account for real-world situations such as project dependencies or mutual exclusivities. For example, if a residential development project is considered, and it’s known that it will require dedicated park space per the city’s guidelines, then a mutual dependency between the residential project and a new park can be established in the model’s parameters. Or if a project such as renewable energy development is dependent on energy prices, the model can examine many different energy price scenarios to examine how the desirability of the project changes.

Phase 4: Prioritization and Portfolio Selection

The scenarios developed can be understood as portfolios of project/ investment alternatives that reflect the prioritized goals ‘demanded’ by the model. It’s understandable then that not all projects are included in each scenario – only those that provide a critical measure of support for the particular goals being selected. However, it’s not uncommon to see some projects consistently included across many scenarios; this provides visibility to the projects that support a broad range of community goals. The portfolios developed provide insight for planners and city leaders as to which projects support which goals, leading to better decision making and consensus building among stakeholders.

The results generated in the case of the Northern Arapaho revealed a number of interesting trade-offs among development projects studied. For example, the scenario that sought to “Maximizing revenue to Tribe with no negative impacts” included in its development portfolio five projects of the eight considered; these were the Tribal Clinic, propane business, broadband and two ranching projects.

Compare this to the scenario that sought “Positive impacts for elder services and healthcare” and the leaders were able to see that Drug Addiction Treatment Center, along with the Joint Tribal Clinic should be given priority above the propane business. The Tribal leaders understood that the methodology would not deliver one optimal portfolio and that hard decisions would still need to be made based on the results. However, the methodology did clearly reveal the trade-offs of those decisions and the impact that each development project would have on the full spectrum of community goals. Armed with this data, leaders of Western communities can make better-informed decisions to achieve more resilience, buffering against economic busts.

Today, a number of these projects have been implemented. But like any Western community, the roadmap has also shifted as new opportunities have presented themselves, and new conditions have arisen. Part of the power of this approach allows tribal leaders to re-evaluate new options as they are presented and to determine how they fit within the portfolio of projects that are already in process. The tribe has an approach for keeping the portfolio dynamic and keeping their end goals in sight.

Varied Western Landscapes. Some communities have turned to less traditional strategies for economic development. For example, Colorado has seen an explosion in the microbrewery industry over the last several years. Image by Marc Diemer.

Varied Western Landscapes. Some communities have turned to less traditional strategies for economic development. For example, Colorado has seen an explosion in the microbrewery industry over the last several years. Image by Marc Diemer.

The Methodology Applied to a Land-use Decision

For the Northern Arapaho Tribe, the methodology was applied to the broad study of community-wide development projects, but for one of Colorado’s largest counties, it was used for a much more focused land-use challenge. Douglas County wanted to determine the best use of a significant development parcel of land in a high visibility area. Complicating the decision-making process were the many land use proposals and the fact that multiple ownership and stakeholders interests needed to be considered.

For the planning department, the land represents an important opportunity to shape the legacy of one of the Front Range’s largest suburban communities, and in so doing, address community values beyond just the revenue-generating interests, while taking into account resource constraints.

Following the same phased approach used with the Northern Arapaho Tribe, Douglas County’s community goals and values were drawn from the comprehensive plan and community vision statements, as well as from the planning staff and stakeholders. In addition to more common economic metrics such as number of primary jobs created and long-term lease revenue, the goals reflected a variety of community interests, such as green space and trail connectivity, multi-generational appeal, support of public transit, and unique character, to name a few. This last one, ‘unique character,’ is a good example of how the approach allows for a qualitative and subjective goal to be measured and fairly represented in a side-by-side evaluation with quantitative measures, such as lease revenue. Establishing quantitative values for qualitative goals requires an interactive scoring and consensus-building effort; when consensus is reached around scores, the results become meaningful with critical stakeholder ‘buy-in.’ For Douglas County, numerous scenarios were modeled, each prioritizing different goals, and each project portfolio offered a much clearer picture for decision-makers as to the trade-offs and impacts on their community.

Conclusion

Sustainability need not be just an aspirational buzzword in the West. We can achieve enduring and resilient communities by using improved decision-making approaches that dutifully consider the impact of all interventions on a full range of community goals and values. The West’s frontier mythology of independence and self-reliance can be celebrated and live on, but far better to leave the economic boom and bust part of the story in the past.


Common Applications

In our work with a variety of Western communities, we’ve found this methodology to be particularly useful in response to these questions and situations:

  • What’s the best use of a new asset in our economic development portfolio?
  • A developer has proposed a new project – what will the full set of impacts be?
  • We have numerous options for an area – which is the best to pursue?
  • Should we continue, expand, or exit a particular current project?
  • We’d like to determine how much to invest in each project being considered
  • We’re not satisfied with the results of our projects portfolio against our goals – how do we fix it?

Marc Diemer is an urban planner and registered landscape architect in Colorado. He is a consultant with Revolution Advisors with special focus in economic development and land planning. Brian Wilkerson is a principal consultant for Revolution Advisors, a strategy and planning consulting firm located in Colorado. He is An urban planner with a specialty in economic development and long-range planning and has led a number of projects using this method across the West. Visit www.revolution-advisors.com.


Published in the October/November 2014 Issue

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