The new policy could force Shelby County to build its own treatment plant. Shafer said that would take three to five years and cost tens of millions of dollars.
In the meantime, new growth outside Memphis would be put on hold.
That could include businesses such as Amazon, which is looking for a new second headquarters. Mayor Jim Strickland said Thursday that Memphis will bid for the HQ, but Shafer said large companies would be more likely to seek large tracts of land — and those are mostly located outside the city.
It could also lead to higher taxes for Shelby County, which includes residents in Memphis, and drive development to Tipton, Fayette and DeSoto counties, she said.
"The county will definitely defend its interests," Shafer said, adding that she would rather negotiate with partners in city government to find a solution than go to court.
New sewers are what drives new development in Shelby County. For years, Memphis extended its systems into undeveloped land in the county. After development filled those areas, they were annexed into the city.
But because annexation has been frozen, the city has no longer has an incentive to extend sewers into the county.
Memphis Public Works Director Robert Knecht has offered to transfer its infrastructure in the county over to county government, but no arrangement has been settled.
The city put sewer lines here planning to annex eventually. That never happened.
" We had invested $6 million and at some point we were contemplating spending $12 million," Knecht said. The city says that's money that could go back to projects inside the city limits.
"Let's make sure we can serve our growth first because we are experiencing tremendous growth," Knecht said. "We are expecting more growth and having the necessary sewer lines is important to be able to support that."
City Council Member Martavius Jones says the city getting nothing in return for the million it doles out.
"Memphis tax dollars have subsidized the growth of Shelby County, period," Jones said. "We have done that to the tune that we don't have the resources to support great land masses."
Doug McGowen, the COO for the city of Memphis, could not address whether a new county sewer system would lead to higher taxes in Shelby County, but he said the city would "absolutely" be willing to negotiate an interim deal with the county if they had to build a sewer treatment plant.
"We have a great working relationship with our counterparts in the county," he said.
He rebutted Shafer's claims that large companies like Amazon would be looking outside the city for space, since the larger tracts of land in the county were not zoned for industrial use anyway.
The city, meanwhile, had large industrial lots with utilities in the southeast part of the city, he said.