Creation of the District
On September 8, 1981 a petition to form the District was filed by South Shore Harbour Development, a Joint Venture consisting of Andrem Corporation and South Shore Harbour Investors. The League City counsel gave its consent pursuant to Resolution No. 141 on March 26, 1981 for the creation of the District. Testifying before the commission in favor of the District was League City Mayor Joe Lamb. MUD 2 was created by order of the Texas Water Commission on July 13, 1982.  Total area of the District at the time was located wholly within the city limits of League City, Texas. 

  The Water Utility Agreement dated April 2, 1981 [PDF Format]

On April 2, 1981 city counsel of League City approved and adopted a Water Utility Agreement between the City of League City, South Shore Harbour Development, Limited (Developer) and the District five months prior to the time the petition to form the district was filed with the Texas Water Commission. This contract was approved one week after the city gave its consent to the formation of the District and was contemplated at the time it gave its consent. The purpose of this contract was to provide a water system, sewer system and drainage system to the residents of the District.  The District was responsible for the construction of the systems subject to oversight by the city.  As each phase of the system became operable it was conveyed to the city.  The city then provided the water and sewer services to the residents.  The city was responsible for the maintenance of the systems.  Section 7.06 of the contract allocated 40% of the taxes the city collected from the District over to the District and Section 7.08 authorized the District to assess ad valorem taxes.

  Amendment dated August 27, 1981 [PDF Format]

This amendment changed the allocation percentage the city paid the district out of the taxes it collected from the district.

  Amendment dated May 26, 1988 [PDF Format]

This amendment changed the allocation percentage the city paid the district out of the taxes and other revenues it collected from the district to a complex formula set out in the amendment. 

  Bonds Issued by the District

The following bonds were approved by the Attorney General of Texas's office on the dates indicated and subsequently marketed by the District:

       1. Bonds in the amount of $2,200,000.00 were approved by Attorney General Jim Mattox on July 14, 1989;
       2. Bonds in the amount of $3,964,0991.10 were approved by Attorney General Dan Morales on July 9, 1992;
       3. Bonds in the amount of $4,320,000.00 were approved by Attorney General Dan Morales on May 22, 1998;
       4. Bonds in the amount of $3,600,000.00 were approved by Attorney General John Cornyn on December 6, 1999;
       5. Bonds in the amount of $1,800,000.00 were approved by Attorney General John Cornyn on October 8, 2002.

The Texas Water Code provides that no bonds may be issued prior to approval by the attorney general's office.   The bond proceeds were to be used to pay for the construction of the sewer and water facilities in the District. It is important to note, for reasons hereinafter explained, that all of the bonds which comprise the total indebtedness of the District were issued after the execution of the  Water Utility Agreement dated April 2, 1981 and the subsequent amendments.