OAKLAND -- Council members are threatening to terminate Oakland's ties to Goldman Sachs if the Wall Street titan refuses to favorably terminate an investment that will cost the city about $4 million this year.

The council's four-member Finance and Management Committee voted 3-0 Tuesday in support of a proposal to stop doing business with Goldman if no agreement is reached on canceling the investment within 60 days.

"Goldman Sachs has been bailed out along with other banks," Councilwoman Jane Brunner said. "It's important that they give back to cities, and Oakland needs a break."

The 1997 interest rate swap agreement has so far saved the city millions. But those gains are dropping because Oakland is paying Goldman a fixed interest rate that's much higher than prevailing rates, which have been depressed since the 2008 financial collapse.

By the 2021 expiration date, the deal is still expected to have saved the city $37 million, assistant city administrator Scott Johnson said.

Union leaders and community members, who packed Tuesday's committee meeting, have stepped up calls recently for Oakland to free itself from the deal now that it is turning against the city.

"Goldman Sachs is a criminal," former Councilman Wilson Riles told the committee. "We need this council to step up and use your political muscle to move this forward."

City negotiators have been talking to Goldman for six months about reducing the estimated $15 million cost of terminating the agreement. However, city staffers cautioned that there is no precedent of a solvent public agency successfully negotiating a below-market price termination price from a solvent bank.

Meanwhile, Oakland continues to do business with Goldman. Earlier this month the bank offered by far the most advantageous price on an issuance of city debt, Johnson said. Oakland, he added, would need a legal opinion as to whether it could completely boycott Goldman.

"If Goldman Sachs chooses to buy some of our bonds, I don't know if we can keep them from buying them," he said.

Councilwoman Pat Kernighan abstained from the vote, saying she needed more information about the potential financial impacts to the city.

Contact Matthew Artz at 510-208-6345.