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A GIS toolset is developed to optimize the water level monitoring stations network in South Florida Water Management District (SFWMD). SFWMD uses the water levels recorded by the monitoring stations to perform water balances useful in the every day management of the district. Although accuracy of the water balances depends on the quality and quantity of measured data, economic and operational constraints make it difficult to maintain elaborate monitoring stations networks. This ArcObjects toolset selects the optimal set of stations from the existing monitoring stations network based on a tolerance level specified by root mean square error in the water level estimation. The applicability of the tool is demonstrated by employing it in the Pool BC area of the Kissimmee River basin.