For example the initial parameter could be 'AssetType' the choices would be Water, Sewer, Drainage... then the second parameter would be 'Location' and depending on what was selected as AssetType this list would be different.
The only way I can think of at the moment is to have 2 parameters called 'SewerLocation' and 'WaterLocation' with different values available, it would be preferable if there was a better way.