N.J. Stat. § 40:62-126
Enlargement and extension of works; contracts for operation; financing improvements. The commission appointed pursuant to section 40:62-109 of this Title and any succeeding commission, however appointed or elected, may enlarge and extend the waterworks and operate the same, or may make a contract for a period not exceeding ten years, or a succession of contracts each not exceeding said period, with any person, to operate such waterworks on such terms as may be agreed upon. If pursuant to this section 40:62-126 or section 40:62-144 or any other provision of sections 40:62-108 to 40:62-150 of this Title, enlargements, extensions or improvements to or in connection with the waterworks have been made and paid for prior to July first, one thousand nine hundred and forty, with funds other than proceeds of bonds or other obligations of the municipalities owning the waterworks, then upon request by resolution of the commission created pursuant to section 40:62-129 of this Title to maintain, operate and extend the waterworks, the municipalities represented by it may incur indebtedness, borrow money and issue their negotiable bonds in amounts sufficient to realize in the aggregate an amount specified in such request not exceeding the amount of funds other than such proceeds theretofore expended by the commission and any predecessor commissions for such enlargements, extensions or improvements. A certificate of the treasurer of the commission delivered to the governing bodies of such municipalities shall for all purposes constitute conclusive evidence as to the description of such enlargements, extensions and improvements and as to the amount, nature, description, source, receipt and disbursement of funds expended for such enlargements, extensions and improvements. The respective amounts to be raised and realized by each municipality represented by the commission shall be fixed in the same proportion as provided in section 40:62-121 in the case of joint and several bonds issued to raise money to pay the cost of the waterworks. Said bonds shall be deemed to be issued for the purpose of financing such enlargements, extensions or improvements and shall be authorized and issued in the method or mode of procedure, prescribed by article one of chapter one of this Title (section 40:1-1 et seq.), except that the bonds shall be conclusively presumed to be authorized and issued for a purpose defined in said article as self-liquidating and shall mature within forty years after the making of such enlargements, extensions or improvements, the ordinance authorizing the bonds may be finally passed notwithstanding the provisions of section 40:1-12 of said article, and the sale of said bonds shall be made simultaneous with or contingent upon the sale by other municipalities of bonds authorized pursuant to said request of the commission. All such bonds shall be subject to call for redemption by the commission, upon three months' notice at any time after five years of issuance. Said bonds shall not be sold except with the consent of the commission and with its approval of the maturities of and rates of interest payable on said bonds. Such consent and approval may be given by resolution of the commission and shall be and constitute a formal assumption by the commission of said bonds, and the interest thereon. The amount realized from the sale of said bonds, after deducting therefrom the cost of issuance of said bonds, shall be paid over to the commission. For all the purposes of sections 40:62-122 and 40:62-127 of this Title, said bonds so issued shall be deemed to be and shall constitute debt incurred by a municipality represented by the commission in connection with the waterworks and extensions thereto and enlargements thereof, formally assumed by the commission appointed pursuant to section 40:62-109 of this Title and its successors.
N.J.S. § 40:62-126