N.J. Stat. § 40:14A-23
Any sewerage authority, for the carrying out and effectuation of its purposes, and (a) any of the local units or (b) any other municipality whether within or without the district, and (c) any other sewerage authority, any municipal authority or any other public body of the State empowered to treat or dispose of sewage (all such local units, municipalities, other sewerage authorities, municipal authorities and other public bodies being hereinafter referred to individually as a "governmental unit") for fostering the relief of waters in, bordering or entering the territorial area of the governmental unit from pollution or threatened pollution or assisting the sewerage authority in carrying out and effectuating its purposes may enter into a contract or contracts providing for or relating to the collection, treatment and disposal of sewage originating in the district or received by the sewerage authority, or originating in the territorial area of or collected by the governmental unit, by means of the sewerage system or any sewage facilities of the governmental unit or both, and the cost and expense of such collection, treatment and disposal. Such contract or contracts may provide for the payment to the sewerage authority by the governmental unit annually or otherwise of such sum or sums of money, computed at fixed amounts or by a formula based on any factors or other matters described in subsection (b) of section 8 of this act or in any other manner, as said contract or contracts may provide, and the sum or sums so payable may include provision for all or any part or a share of the amounts necessary (1) to pay or provide for the expenses of operation and maintenance of the sewerage system, including without limitation insurance, extension, betterments and replacements and the principal of and interest on any bonds, and (2) to provide for any deficits resulting from failure to receive sums payable to the sewerage authority by such governmental unit, any other governmental unit or county, or any person, or from any other cause, and (3) to maintain such reserves or sinking funds for any of the foregoing as may be required by the terms of any contract of the sewerage authority or as may be deemed necessary or desirable by the sewerage authority. Any such contract may provide that the sum or sums so payable to the sewerage authority shall be in lieu of all or any part of the service charges which would otherwise be charged and collected by the sewerage authority with regard to persons or real property within the territorial area of the governmental unit. Such contract or contracts may also contain provisions as to the financing and payment of expenses to be incurred by the sewerage authority and determined by it to be necessary for its purposes prior to the placing in operation of the sewerage system and may provide for the payment by the governmental unit to the sewerage authority for application to such expenses or indebtedness therefor such sum or sums of money, computed as said contract or contracts may provide and as the governing body (hereinafter described) of the governmental unit shall, by virtue of its authorization of and entry into said contract or contracts, determine to be necessary for the purposes of the sewerage authority. Every such contract shall be authorized and entered into under and pursuant to a resolution adopted by the authority in the case of a sewerage or other authority, an ordinance of the governing body in the case of a municipality, a resolution of the governing body in the case of a county, and, in the case of any other public body, a resolution of the commission, council, board or body by whatever name it may be known (in this section sometimes referred to as "governing body") having charge of the finances of such public body, but the terms or text of said contract need not be set forth in full or stated in any such resolution or ordinance if the form of said contract is on file in the office of the clerk or other recording officer of the governmental unit or its governing body and the place and fact of such filing is described in the resolution or ordinance. Any such contract may be made with or without consideration and for a specified or an unlimited time and on any terms and conditions which may be approved by or on behalf of the governmental unit and which may be agreed to by the sewerage authority in conformity with its contracts with the holders of any bonds, and shall be valid whether or not an appropriation with respect thereto is made by the governmental unit prior to authorization or execution thereof. Any contract heretofore or hereafter entered into pursuant to authority of this section shall be valid and shall be binding upon the parties thereto whether or not the terms or text of said contract had been set forth in full or stated in any ordinance or resolution authorizing such contract provided the form of such contract had been filed as aforesaid and the place and fact of such filing was described in such ordinance. Every such governmental unit is hereby authorized and directed to do and perform any and all acts or things necessary, convenient or desirable to carry out and perform every such contract and to provide for the payment or discharge of any obligation thereunder in the same manner as other obligations of such governmental unit. Subject to any such contracts with the holders of bonds, the sewerage authority is hereby authorized to do and perform any and all acts or things necessary, convenient or desirable to carry out and perform every such contract and, in accordance with any such contract, to waive, modify, suspend or reduce the service charges which would otherwise be charged and collected by the sewerage authority with regard to persons or real property within the territorial area of the governmental unit, but nothing in this section or any such contract shall prevent the sewerage authority from charging and collecting, as if such contract had not been made, service charges with regard to such persons and real property sufficient to meet any default or deficiency in any payments agreed in such contract to be made by the governmental unit.
N.J.S. § 40:14A-23