65 ILCS 5/11-126-6

All the income received by a municipality from such a system of waterworks, from the payment and collection of water rents or rates, shall be kept in a separate fund and shall be applied first in the payment and discharge of the principal of and the interest on bonds or money borrowed and used in the construction of the waterworks and of the operating expenses thereof. Any surplus may be applied in such manner as the corporate authorities may direct.