In 2015, as Mayor Rahm Emanuel was in the thick of dealing with a multibillion-dollar pension shortfall and other serious financial troubles, the investment firm Goldman Sachs made an unsolicited pitch to City Hall, according to a top mayoral aide:

How about privatizing the city’s water and sewer systems to get a quick splash of cash?

The thought seemed to be along the lines of what former Mayor Richard M. Daley orchestrated in 2008 for Chicago’s parking meters: Sell or lease the infrastructure, collect a big payout to deal with budgetary issues — and brace for rate increases at the hands of the private investors who would now be in control.

City officials vetted the Goldman proposal but ended up taking a pass, believing there were too many potential complications and too little money — in the end, Carole Brown, Emanuel’s chief financial officer, said in an interview, maybe only a “couple billion” dollars.

“It wasn’t compelling enough,” said Brown, who was hired in May 2015 and “inherited the idea,” which she said was floated a couple of months before her arrival.

While the city’s financial picture is somewhat improved — thanks largely to tax increases aimed at dealing with a now-$36 billion pension shortfall — City Hall isn’t ruling out water privatization if a viable plan is offered.

“We’re not looking for ways to privatize our water and sewer systems,” Brown said. But officials “will listen” to ideas, she said. “We seriously consider all those that we have time for.”

The details of what Goldman was proposing aren’t clear. The Emanuel administration wouldn’t release Goldman’s proposal. The Chicago Sun-Times tried for months to obtain it under the Illinois Freedom of Information Act, the law promising public access to most official records.

City Hall said the records are exempt from the law “because they reflect proprietary information prepared by a potential vendor and were submitted under a claim that they were proprietary, privileged and confidential.”

Brown said the conversations with Goldman ended before things got too far — including possible rate hikes and whether there were investors, though she said, “I would expect they had potential investors in mind.”

Jeff Scruggs, managing director of Goldman’s public sector and infrastructure group in New York, wouldn’t comment. A Goldman spokesman said the company “is confident the city conveyed the facts” accurately.

Brown said the city’s outstanding borrowing to cover water and sewer infrastructure improvements in recent years — the debt from which now totals $5.4 billion — would need to be covered by anyone buying the system.

As a result, the city’s take — based on Brown’s “back-of-the-envelope” understanding — after covering those loans would have been no more than a “couple billion” dollars, she said.

Which isn’t much given that the water system — which includes a water-intake “crib,” two purification plants, a dozen pumping stations and 4,400 miles of water mains that help deliver nearly a billion gallons of water each day — is probably the city’s most important resource, along with O’Hare Airport, according to city officials.

Daley, who retired in 2011, once toyed with privatizing O’Hare and raised speculation that the water system also might be on the table.

And, nearly a decade ago, Daley drew the ire of many Chicagoans by privatizing the city’s 36,000 parking meters in a deal with a Morgan Stanley-led investment group that paid City Hall $1.15 billion upfront in exchange for meter revenues for 75 years. One of Daley’s nephews worked at Morgan Stanley — though the firm and City Hall have said he had nothing to do with the deal.

One of the parking kiosks that were installed after Chicago's parking meters were privatized.

One of the parking kiosks that were installed after Chicago’s parking meters were privatized. | Sun-Times files

Steep rate hikes followed the meter deal. Parking went up from $3 an hour in 2008 in the Loop to $6.50 by 2013.

Vowing not to repeat that type of deal, Emanuel and the City Council embraced a “privatization ordinance” that requires more scrutiny before valuable city assets can be sold or leased.

The Bond Buyer, a financial publication, said the measure puts “in place a detailed public review of the cost effectiveness, impact and value of any proposed deal and requires more review, analysis and debate on any future deals. It also puts in place safeguards on the use of proceeds.”

Brown said any privatization of the water and sewer systems would be subject to that ordinance, and officials also would have to clear other legal hurdles.

Many communities around the country have turned over their water supplies to private firms. And many have regretted that when faced with soaring rates and a lack of control. In 2017, 36 municipal water and sewer systems across the United States were sold to private companies or investors, according to Bluefield Research, a Boston market research and consulting firm specializing in water issues. In 2016, there were 13.

If a government sells its water system, “having some regulatory oversight . . . is worth considering to protect rate payers and, in some ways, all parties,” said Janice Beecher, director of Michigan State University’s Institute of Public Utilities.

City officials said they’d want to maintain some control over the water and sewer systems if they ever were privatized.

In 2017, the city collected $732.7 million in revenue from water fees and $366.3 million in sewer charges, city officials said.

The city’s current water rate is $3.88 per 1,000 gallons. The price will rise June 1 to $3.95.