In the past decade considerable research in several disciplines has been oriented toward the design of optimal capacity expansion plans for water resource systems. The emphasis of most of these efforts has been directed toward minimization total cost outlays in project planning. This focus somewhat limits the full applicability of the optimal capacity expansion solutions since it is believed that the criteria of economic efficiency is not well addressed in this mode. This study explores the merits of scheduling water resource project facilities on the basis of anticipated economic benefits provided, an approach needed only infrequently in the systems engineering literature. Using the Umatilla River Basin in Northeast Oregon as a case study example, the facilities (and their alternatives) of a previously planned federal water resource development project in that area were carefully analyzed with respect to the magnitude and timing of anticipated benefits and costs. Irrigated agriculture and fishery development/enhancement benefits were the two principal purposes of the project considered. In addition, benefits arising from flood prevention, municipal and industrial water supply, and erosion control were also integral to the original overall evaluation. The design of the research was to first implement a basic scheduling model in the context of the case study area and then to explore the ramifications of exchange-theoretic and distribution-theoretic criteria on the timing of facilities and the ultimate allocation of water among purposes. The model implemented was aimed at maximizing the present value of net benefits inherent in an optimally timed set of facilities subject to an annual budget constraint. Having designed the model along integer programming lines, three different solution techniques were explored in order to realize a desirable level of efficiency in basic model solution. It was found that reasonably efficient solutions could be obtained. By optimally timing the facilities it was found that the total present value of net benefits of the project could be significantly enhanced when compared to the original schedule proposed in the project planning documents. Of even greater interest is the issue of incorporating into the planning process (and specifically into the capacity expansion mode of planning) considerations of tradeoffs or exchanges between project beneficiaries. Such exchanges and other distributional criteria can affect and be affected by the selection and timing of project facilities within an overall project design. These interrelationships are explored paying particular attention to the way in which exchanges of water (via water rights transfers) could establish higher levels of benefits in future years. Noneconomic exchange processes such as the enforcement of extant property rights relating to water resources are another issue which complicated the process of water planning. Such distributional criteria are difficult to incorporate into the capacity expansion mode of planning analysis. However, ways are explored by which the basic model may be modified and used by decision makers in order to take account of more realistic problems in water resource planning for individual river basins.