BROWNSVILLE, Texas (AP) - Hurricane Dolly churned into a Category 2 storm as its eye neared the Texas-Mexico border Wednesday, bringing fierce winds and heavy rains that blew down signs, damaged an apartment complex and knocked out electricity to thousands.

Forecasters warned of up to 15 inches of rain that could produce flooding and breach levees in the heavily populated Rio Grande Valley. Thunderstorms were attributed to Dolly as far away as Houston, 400 miles up the Texas coastline.

In Mexico, fields were filling with water, palm trees were bent over in the wind and beaches were closed to the public.

Maria Miguel, 102, and seven family members fled their wooden shack in the Mexican fishing community of Higuerilla and spent the night at a convention center-turned-shelter in Matamoros. "I don't know if my poor house will withstand the rain and wind," Miguel said.

Mexican soldiers made a last-minute attempt to rescue people at the mouth of the Rio Grande. The soldiers battled storm-charged waves in an inflatable raft to rescue at least one family trapped in their home, while others further inland were still refusing to go to government shelters, said Matamoros spokeswoman Leticia Montalvo.

"These are people who did not want to leave, and now they are in trouble," Montalvo said.

On Texas' South Padre Island, an apartment complex roof partially collapsed early Wednesday. Residents said they didn't believe anybody was injured. Melissa Zamora, a spokeswoman for the town of South Padre Island, said the roof collapse caused a plumbing leak and few residents were being relocated.

"I thought it was just a big clap of thunder, (then) saw this stuff flying around and it's the roof," said Buck Dopp, who lives in the ground floor apartment under the collapsed roof. Dopp and his family packed up and left the building, despite their plans to ride out the storm.

The causeway linking the island to the mainland remained closed early Wednesday.

Dan Quandt, a spokesman for South Padre Island emergency operations, said winds were picking up to around 50 mph and were expected to increase later Wednesday morning. He said there was a steady rain falling, but no reports of flooding. A sign on a hotel blew off, but no one was injured and it did not pose a hazard, he said.

Power was knocked out to more than 13,000 customers in Cameron County, where Brownsville is located, utility company AEP Texas said. Power also was out on South Padre Island.

In Brownsville, palm trees leaned and small debris was strewn across the all-but empty streets. The windows and doors of shops were boarded up with plywood and most businesses - including gas stations - were closed. At one gas station, workers were pelted by horizontal rain as they scrambled to lock pumps and close down.

Thousands of people fled to shelters in towns on both sides of the border. Evacuees flowed into an emergency shelter at Gladys Porter High School, even as Dolly's winds dismantled a school sign. Principal Dora Sauceda said people were lined up outside when she arrived at 4:30 a.m. The shelter was quickly nearing its 300-person capacity.

Miguel Angel Cruz and his wife Maria Hernandez brought their four children to the shelter because they feared the trailer they lived in wouldn't withstand the wind and a nearby resaca - or pond formed by a bend in the Rio Grande - would flood.

"Yes, we're scared," Cruz, a welder, said in Spanish as his family settled in. "It's our first hurricane."

At noon EDT Wednesday, the storm's center was about 35 miles northeast of Brownsville, moving northwest at about 7 mph. The storm had maximum sustained winds of near 100 mph, and its eye was expected to hit near the border midday.

Cities and counties in the Rio Grande Valley were bracing for massive flooding and levee breaks. Tornado watches were in effect for coastal counties between Corpus Christi and Houston until Wednesday afternoon.

Local officials urged residents to move away from the Rio Grande levees because if Dolly continues to follow the same path as 1967's Hurricane Beulah, "the levees are not going to hold that much water," said Cameron County Emergency Management Coordinator Johnny Cavazos.

The U.S. Census Bureau said that based on Dolly's projected path, about 1.5 million Texans could feel the storm's effects.

Gov. Rick Perry declared 14 south Texas counties disaster areas, allowing state resources to be used to send equipment and emergency workers to areas in the storm's path.

The storm, combined with levees that have deteriorated in the 41 years since Beulah swept up the Rio Grande, poses a major flooding threat to low-lying counties along the border. Beulah spawned more than 100 tornadoes across Texas and dumped 36 inches of rain in some parts of south Texas, killing 58 people and causing more than $1 billion damage.

"We could have a triple-decker problem here," Cavazos told a meeting of more than 100 county and local officials Tuesday. "We believe that those (levees) will be breached if it continues on the same track. So please stay away from those levees."

Around Brownsville, levees protect the historic downtown as well as preserved buildings that were formerly part of Fort Brown on the University of Texas at Brownsville campus. Outside the city, agricultural land dominates the banks of the Rio Grande, but thousands of people live in low-lying colonias, often poor subdivisions built without water and sewer utilities.

In the Gulf of Mexico, Shell Oil evacuated workers from oil rigs, but said it didn't expect production to be affected. It also secured wells and shut down production in the Rio Grande Valley, where it primarily deals in natural gas. Mexico's state-run oil company, Petroleos Mexicanos, said it had evacuated 66 workers from an oil platform off the coast of the port city of Tampico.

Associated Press writers Christopher Sherman in Brownsville; Mark Walsh in Matamoros, Mexico; Jaime Zea in Mexico City; Regina L. Burns in Dallas and videographer Rich Matthews on South Padre Island contributed to this report.