Municipal guarantee of notes and bonds issued by water authority re water distribution system.

(b) Any funds so loaned by a town to the authority shall be evidenced by such notes or other evidences of indebtedness as may be appropriate. Any member town is authorized to enter into an agreement to lend such funds as may be required upon complying with such procedures as may be prescribed by such town for the issuance of general obligation bonds of such town provided, any such town may lend such funds as part of its general operating budget. Such funds as may be received by such town from the authority shall be used by the town as it shall determine in its budget.