So much for high hopes that a double-upgrade in Chicago’s general obligation bond rating by a small Wall Street rating agency would trigger similar increases by the bigger players, reducing borrowing costs.

The best Standard & Poor’s could do Friday is reaffirm Chicago’s BBB+ general obligation bond rating and raise the rating on the city’s 1997 G.O. “limited tax building acquisition certificates”– from BBB+ to BBB. The certificates are “payable from legally available funds and are not secured by a debt service levy,” the report states.

Credit analyst Carol Spain acknowledged Chicago has made “significant progress toward stabilizing” its finances.

Mayor Rahm Emanuel has done that by “increasing pension contributions and statutory requirements to fund pensions on an actuarial basis,” eliminating scoop-and-toss borrowing and reducing the city’s once-heavy reliance on “non-recurring revenues” with a commitment to eliminate the structural deficit by 2019.

But Spain said the warning flags simply cannot be ignored. They are: Chicago’s “high fixed costs tied to its liabilities;” “significant” and fast-rising rising public safety expenses tied to a two-year plan to hire 970 additional police officers and “distressed overlapping governments” like the Chicago Public Schools that “will likely continue to challenge” the city’s “fiscal sustainability.”

“We therefore view Chicago as being at a crossroads. While our rating and outlook assume the city will maintain its current course emphasizing structural solutions to address growing liabilities, the practical reality remains that the city needs to maintain the political will and resources to address the challenges or credit quality will also reverse its trajectory,” Spain was quoted as saying.

Chief Financial Officer Carole Brown maintained that Chicago is “in a better financial position today” than it was when Emanuel took office and that S&P acknowledged that nearly two years ago by changing the outlook on the city’s general obligation bonds from negative to stable.

“Based on S&P’s criteria, our rating was capped at the current rating of BBB+, so the City was not anticipating an upgrade at this point,” Brown was quoted as saying in a statement.

“We will not stop our deliberate work to improve our long-term financial condition while continuing to grow our economy and make critical investments citywide.”

Chicago taxpayers have paid a heavy price, just to begin to solve the city’s $36 billion pension crisis.

They have already endured $1.2 billion in property taxes for police, fire and teacher pensions; a 29.5 percent tax on water and sewer bills for the Municipal Employees Pension Fund, the largest of the four; and a pair of telephone tax increases for the Laborer’s pension fund.

More tax increases are on the way. By the city’s own estimates, police and fire pension costs will rise by $297.3 million or 36 percent in 2020. The Municipal and Laborers plan costs will grow by $330.4 million or 50 percent in 2022. Emanuel has not said how he plans to close those gaps.

In raising Chicago’s bond rating by two notches this week, Kroll Bond Rating Agency acknowledged the need to “identify funding sources” for four city employee pension funds “once the interim period ends and full actuarial funding begins.”

But Kroll’s managing director Harvey Zachem said the mayor and City Council have already demonstrated the political will to confront the challenge.

“They did implement a very large, $543 million property tax levy increase and pretty substantial water and sewer usage tax increases also. We do see that as an indication of willingness to take on the 2020 and 2022 spikes,” Zachem said.

“If they were a non-home-rule unit, they’d be limited to mostly the property tax and they’d be capped…[But] they do have options with home-rule status. We would expect some combination of sources to be used.”

Kroll managing director William Cox referred to the in-depth study Kroll published last summer about the city’s pension crisis. It examined Chicago’s tax and wealth base and compared it to nearby suburbs and other large cities.

“We looked at the impact of various taxes, fees and charges and compared that to income levels of both households as well as size of businesses,” Cox said.

“Our conclusion was that Chicago, while it has a growing overall tax burden, that burden is still relatively modest compared to others in the suburban ring, as well as others across the country.”

Kroll’s senior managing director Karen Daly added, “The wealth base can handle however the city administration chooses to pay for these obligations.”