N.J. Stat. § 40:14B-5
The governing bodies of any two or more municipalities, the areas of which together comprise an integral body of territory, may, by parallel ordinances duly adopted by each of such governing bodies within any single calendar year, create a public body corporate and politic under the name and style of "the ................. municipal utilities authority," with all or any significant part of the name of each such municipality or some identifying geographical phrase inserted. Said body shall consist of the members thereof, in an aggregate number as determined in this section, who shall be appointed by resolutions of the several governing bodies as provided in this section. Said body shall constitute the municipal authority contemplated and provided for in P.L. 1957, c.183 (C.40:14B-1 et seq.) and an agency and instrumentality of the said municipalities. The number of members of the municipal authority to be appointed for terms of office by the governing body of any such municipality shall be as may be stated in said ordinances which shall be not less than one nor more than three. After the taking effect of the said ordinances of all such municipalities and after the filing of certified copies thereof as provided in section 7 of P.L. 1957, c.183 (C.40:14B-7), the appropriate number of persons shall be appointed as members of the municipal authority by the governing body of each municipality.
The members next appointed after the effective date of P.L. 1999, c. 268 shall divide themselves by lot into classes. If there are five or more members, there shall be five classes. If there are fewer than five members, there shall be as many classes as there are members. To the extent possible, there shall be an equal number of members in each class, and each class shall contain no more than one member from each municipality. The term of members composing the first class shall be vacated at the expiration of the fifth year; the term of members composing the second class shall be vacated at the expiration of the fourth year; the term of members composing the third class, if any, shall be vacated at the expiration of the third year; the term of members composing the fourth class, if any, shall be vacated at the expiration of the second year; and the term of members composing the fifth class, if any, shall be vacated at the expiration of the first year. The term of members of each class shall expire on February 1 of their respective year.
On or after January 1 in the year in which expire the terms of such next appointments, the appropriate number of persons shall be appointed as members of the municipal authority by the governing body of each municipality, to serve for terms commencing on February 1 in such year and expiring on February 1 in the fifth year after such year. In the event of a vacancy in the membership of the municipal authority occurring during an unexpired term of office, a person shall be appointed as a member of the municipal authority to serve for such unexpired term by the governing body which made the original appointment for such unexpired term.
N.J.S. § 40:14B-5