N.J. Stat. § 40:62-121
Any such waterworks may be acquired subject to the lien of any mortgage or mortgages thereon; and for the purpose of raising money to pay the cost of acquiring the waterworks so acquired or to be acquired, whether by purchase or condemnation, and to pay the cost, or part of the cost, of enlarging, extending and improving the same, the municipalities which are to own the waterworks or the enlargements, extensions and improvements to the same may issue at one time or from time to time permanent serial bonds and in anticipation of the issuance of such permanent serial bonds, temporary bonds, and pay such temporary bonds from the proceeds of sale of the permanent serial bonds.
Such municipalities may issue such bonds jointly in the names of all such municipalities, in the same manner and pursuant to the same provisions of law that apply to the issuance of other municipal bonds, and each municipality shall adopt such ordinances and resolutions and cause such bonds to be sold, executed and delivered as if such bonds were its own separate obligations; or each municipality may issue and sell its own bonds separately for its proportion of said costs, as hereinafter provided.
The proceeds of sale of said bonds shall be received by the treasurers of the municipalities and except in the case of funding bonds issued to pay temporary bonds immediately be transferred to the commission or any succeeding commission then in office.
The power to issue bonds and their validity shall not be dependent on or affected by the validity or regularity of the proceedings to establish the commission or to acquire the waterworks or to make the enlargements, extensions or improvements thereof, and said bonds shall be direct obligations of the municipalities issuing the same and if not otherwise paid, shall be paid by general tax.
The bonds so issued, if jointly and severally issued, shall be the joint and several obligations of the municipalities in whose names they are issued, but the municipalities shall be liable as among themselves for the payment of the principal and interest thereon in the proportion that the assessed value for taxation of all the real estate in each of the municipalities for the year preceding the time when such waterworks shall be acquired bears to the total assessed value for said year of all the real estate in all of the municipalities joining in the issuance of said bonds.
If the municipalities shall decide to issue separate bonds, the bonds so issued shall be the obligations of such municipalities respectively, and the amount thereof shall be fixed in the same proportion as hereinbefore provided in the case of joint and several bonds.
N.J.S. § 40:62-121