The Limay Water District (LIWAD) was formed under the local Sangguniang Bayan Resolution No. 161 in November 1988. Thereafter, a Deed of Transfer for the existing water supply system facilities including the right-of-way and sites was given by the local government to the newly formed Water District. In December 1988, LIWAD started its operation under the management of General Manager Ernesto Enriquez. The Local Water Utilities Administration (LWUA) granted a loan of about ₱ 1,107,295 as financial assistance for the rehabilitation of the existing water supply system, start-up costs and training of employees. A ₱ 100,000 grant was also extended to the District after being affected by the 1990 earthquake.
A separate water system serving Brgy. Lamao located about 6 km south of town proper was reportedly constructed in 1987 and was then operated by the Barangay Council. In November 1990, the Lamao water system was turned over to LIWAD. The system consisted of one deep well source, one elevated tank, and a pipe distributed system. The independent water system initially gave 474 additional service connections to the District.
By virtue of Presidential Decree 198 known as the Provincial Water Utilities Act of 1973, the Municipal Board of Limay through the Local Water Utilities Administration passed a resolution on November 4, 1988 creating the Limay Water District.
A Conditional Certificate of Conformance (CCC No. 379) was issued by LWUA formally establishing the water district on November 25, 1988. Consequently, the Municipal Government turned over to LIWAD the control and supervision of the municipal water supply system.