BAYONNE, NJ – With only weeks to go before Bayonne’s $135.5 million 2016 budget needs to be finalized, city officials are scrambling for revenues to fill a $15 million gap created when a development deal for a section of the Peninsula at Bayonne Harbor fell through.

When the city could not reach a final agreement with Kate Howard LTD to build at the Harbor Station South district, it sent shockwaves throughout Bayonne that are still being felt. The company was to make an initial $15 million payment to the city, which will not happen now.

At last week’s City Council meeting, a budget hearing was held, and Bayonne residents had plenty to say about the predicament the city is faced with.

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Peter Cresci, an attorney and former city official, spoke for about 40 minutes, questioning how Bayonne ended up in the position it is now in.

“We keep winding up in this situation, with a gun to our heads, because we do these one-shot deals,” he said.

Bayonne Chief Financial Officer Terrence Malloy defended the city, saying “This deal fell through as many real estate deals do.”

Peter Franco, a frequent critic of the administration, pressed Malloy about what the effect would be if the $15 million was not received from other means. Malloy said it could conceivably mean a tax increase of $855 for the average Bayonne home, but added “that is not the probability.” The city had originally announced a 2.6 percent tax increase, about a $120 hike.

The meeting ended with a surprise resolution from Third Ward Councilman Gary La Pelusa to order an immediate hiring freeze. Council President Sharon Nadrowski said she wanted to table La Pelusa’s measure because she thought it was too open ended and she was concerned about its ramifications if it was not fully thought out.

City Business Administrator Joseph DeMarco said a temporary hiring freeze could be put into place to allow for additional time for the La Pelusa measure to be reviewed. The council voted 5-0 to table La Pelusa’s resolution until its May 18 meeting and impose a 30-day temporary hiring freeze.

The following day, Nadrowski and DeMarco said municipal summer camp, pool, and crossing guard hirings were now on hold because of the freeze.

DeMarco said the city was working on closing other real estate deals at the Peninsula and elsewhere in the city in an attempt to bridge the budget gap.