OAKLAND, Calif. – On the eve of the July 4 holiday, Oakland’s City Council took a historic step toward independence from Wall St. giant Goldman Sachs as it voted to end an interest swap deal that has cost the city millions since the financial crisis began.

The motion, passed unanimously at the Council’s July 3 meeting, calls on Goldman Sachs to negotiate an end to a 1998 interest swap agreement without forcing the city to pay an over $15 million termination fee. The pact benefited the city at first, but now is costing Oakland some $4 million a year.

If no agreement is reached within 70 days, Oakland would stop doing business with the financial giant.

Oakland is the first to take such a step, among more than 1,100 government entities around the country with interest swap agreements, with costs to taxpayers estimated at more than $2.5 billion a year.

City Council members and community speakers pointed to the paradox that the same financial giants who were bailed out with taxpayer money when they were in crisis are now rejecting efforts of crisis-ridden governments to ease agreements that are draining their resources.

Councilmember Rebecca Kaplan called the City Council’s action “part of a growing movement of accountability on banks who took billions from taxpayers but are not paying it forward.”

Councilmember and Finance Committee chair Ignacio de la Fuente added, “It’s time to take a stand. We need to use the economic power we have to send a message.”

The Oakland Coalition for Social and Economic Justice, a coalition of community, labor, occupy and faith groups, first brought the issue to the City Council in February.

The pact goes back nearly 15 years.

In 1998 Oakland agreed with Goldman Sachs to switch variable rate payments on bonds that helped fund pensions for police and firefighters, to a fixed 5.6 percent interest rate, with the deal slated to last until 2021.

The city gained in the first few years, as interest rates rose. When the original bonds were paid off in 2005, Oakland remained in the agreement, expecting to gain some $30 million more.

But when the Federal Reserve slashed interest rates during the financial crisis, Goldman Sachs and other financial institutions began to reap billions from such pacts while only having to pay very low interest rates themselves. Meanwhile, the government entities left holding the bag face heavy cancelation fees if they decide to end the pacts.

The city has now paid about $32 million more to Goldman Sachs than it has received from the agreement, and stands to lose millions more before the pact ends in 2021.