The Municipal Development District (MDD) was formed in 2009 by proposition in Shenandoah's city limits and also in the city's extraterritorial jurisdiction (ETJ), which is the area immediately adjacent to the city limits. The MDD imposes an additional one-half cent sales tax within this area to fund projects related to economic development under the provisions of the laws of the State of Texas. A number of major projects have been funded by the MDD, such as wastewater lift station improvements, detention pond improvements and pathways in commercial areas. Improvement projects are upgrades and expansions to existing facilities to meet the demands of growth and development in Shenandoah.
The MDD also funded the drilling of the Catahoula Well and construction of a water plant in partnership with the City of Panorama Village to meet the obligations of both cities for ground water reduction in compliance with the Lone Star Groundwater Conservation District requirements.
The board consists of five voting members and two non-voting members. They are all residents, and two of the five are city council members. They meet on the fourth Wednesday of each month at 6:00 pm at city hall, or as needed.