The city of Memphis will no longer offer sewer taps in unincorporated parts of Shelby County, bringing new development to a standstill and forcing county officials to consider spending millions — if not tens of millions — developing a county sewer system.

The city will continue to offer sewer services to existing customers and will honor agreements with surrounding cities, but will not authorize sewer connections for any developments that don't have an "existing executed contract with approved plans," city officials said in an Aug. 18 letter obtained Tuesday by The Commercial Appeal.

"We are here to serve Memphis first," said Memphis Public Works Director Robert Knecht, who co-signed the letter with Engineering Division Director Manny Belen.

Tuesday afternoon, Knecht said it "isn't my business" to know how many developers would be affected in the unincorporated county, and that he didn't know how many taps are usually done there in a month. He also said he didn't know how much money the city would save with the new policy — although the city won't need to spend $12 million extending sewers to the Gray's Creek area east of Cordova.

Developer Kevin Hyneman said he'll no longer have sewer access for a property he just bought last week. Hyneman said he likes Mayor Jim Strickland but the decision is "just not right" — especially without advance notice to developers, some of whom spend hundreds of thousands of dollars just getting to the point of executing a contract.

"I don't think this is the right way to promote development in the city of Memphis," he said. "It's going to drive more people to DeSoto County (Mississippi)."

Hyneman added: "This is not something you do at midnight."

Unless the city reverses course, Shelby County Mayor Mark Luttrell will convene a committee in September to discuss the county's options, Chief Administrative Officer Harvey Kennedy said Tuesday.

One option is to buy the city sewer assets and developing a treatment plant, Kennedy said. Knecht offered to "transfer" all sewer infrastructure outside of Memphis to the county, although Kennedy said the county wouldn't be ready to take that step until next fiscal year at the earliest.

In the meantime, developers will be left sitting on their properties, Hyneman said.

"I'm sure they're concerned," Kennedy said of developers. "I just can't see how we can move any quicker."

The new Memphis-first sewer policy will help lower maintenance and operations costs that have strained the sewer enterprise fund in recent years, Knecht said. The council recently approved a sewer and wastewater rate hike to help fund $1.07 billion worth of upcoming Public Works projects, including more than $800 million for sewers.

"We need to make sure those commitments serve our city and our citizens first," he said.

Asked if the city will review its sewer services contracts with municipalities in the future, Knecht said those decisions would be made based on the capacity of city sewers.

In a memo to his colleagues last week, City Council member and builder Reid Hedgepeth said the council "was not privy to this administration's thoughts and drastic action."

"I can appreciate the rationale for why the city may have needed to identify a different option to ensure the sustainability of our sewer system," he wrote, "but I disagree 100 percent in the manner in which this entire matter was implemented and that none of us, including me as the Public Works Committee chairman, were notified."

Hedgepeth declined to elaborate on his comments for this article.

Strickland's move could endanger his support from the real estate community — which wields significant political clout locally — as he prepares for a 2019 reelection campaign.

The leadership of the West Tennessee Home Builders Association strongly objects to the new policy, which was discovered Friday, association president James Reid said in a statement. The association is still researching the impact of the new policy but even if the change affects few developers, a quiet rollout that surprised the council and developers was the wrong approach, he said.

"It shows a disrespect on the part of the mayor that cuts to the ideas we thought we had," Reid said.

Strickland couldn't immediately be reached by phone and his communications team didn't grant an interview with him.

"In hindsight, maybe that would have been something we should have done," Knecht said of giving developers advance notice. "But we're looking at this to service Memphis."

The city's sewer system was built partially with federal grants awarded in the 1970s, prompting the home builders to inquire into whether the city's new policy runs afoul of any laws or grant requirements. But Knecht said the city has received a legal opinion that it's on safe ground, and has declined to extend sewers to areas in the past — most recently to the Mary's Creek area.

Council member Frank Colvett Jr., who heads the council's Planning & Zoning Committee, said his hope is that the county will pick up the burden of paying for the ever more expensive sewer services outside the city limits.

"In the unincorporated areas, I think it's only fair that Shelby County picks up some — or all — of that burden," he said.

Shelby County Commissioner Terry Roland said state and federal regulations require the city to offer the sewer services -- and the city could face a lawsuit if it refuses.

"We'll jerk them into court so fast it'll make their head spin," he said.

Reach Ryan Poe at poe@commercialappeal.com and on Twitter at @ryanpoe.