Clermont to seek $15.6M state revolving fund loan for drinking-water projects with half forgiven

The City of Clermont authorized staff on Feb. 24 to apply for a $15.6 million Drinking Water State Revolving Fund (SRF) loan that would support multiple capital drinking-water projects identified by the Florida Department of Environmental Protection.

Finance Director Scott Bohr explained that the SRF award would include approximately 50% principal forgiveness in the form of loan subsidization. "This action makes the city eligible for a $15,600,000 loan from the SRF program," Bohr said, adding that FDEP will supply exact terms about six weeks after application and staff will report terms back to council.

Key program dates Bohr listed: application due by March 12, 2026; loan acceptance due by June 10, 2026; projects must be completed by December 2031; repayment would begin the earlier of six months after the last project is complete or FY 2029–30.

Council members probed funding sources for repayment and whether the water fund could absorb the balance or require rate adjustments. Bohr said the water fund (and possibly water impact fees) would be the likely repayment source and that the current rate study—already underway—would determine any rate impacts. He noted options to draw funds as reimbursements (0% interest in a preferred track) or an upfront distribution that would carry interest.

Council voted 5–0 to authorize application and acceptance of the loan should terms be acceptable.

Staff said some of the projects listed for SRF funding are already included in the city’s five-year plan and capital budget; expected projects discussed included a water treatment facility in the Wellness Way area and other treatment and distribution upgrades.

The city will return to council with final loan terms once FDEP provides them.