Optimization techniques are developed to assist in the implementation of longrange water resource plans. A stochastic programming formulation for obtaining an operating policy for single, multi-purpose reservoirs based on the continuity equation, stochastic inflow and demand, and chance constraints is developed. The chance constraints are converted to an equivalent linear deterministic set of constraints by a material balance equation. The formulation is then extended to a linked, multiple-purpose reservoir system. Both linear and quadratic objective functions are used with the equivalent linear constraint set. The problem addressed is to select reservoir storage capacities, schedule construction timing, and establish an operating policy which minimizes the total cost of a linked system of multi-purpose reservoirs. This mixed integer-continuous linear programming problem is separated into a linear programming problem and an integer programming problem using Bender's decomposition technique. The methodology is applied to Cypress Creek Basin in northeastern Texas.