The zero-interest state loan would pay for a 2-million-gallon tank, new water mains and backup generators. Half is forgiven. The council signs off Tuesday.

Updated Oct. 17: The City Council approved the loan agreement 5-0 on Oct. 13 as part of the consent agenda, according to the summary of actions. More from that meeting in our story on the 2045 plan vote.

Clermont is set to borrow up to $15.36 million from the state to strengthen its drinking water system, and half of it would not have to be paid back.

The City Council is asked Tuesday to let the mayor sign the loan agreement with the Florida Department of Environmental Protection. The agreement and a staff report are in the council’s agenda packet for Oct. 13.

The money comes from the state’s Drinking Water State Revolving Fund. Clermont’s project is on the fund’s priority list for supplemental money tied to Hurricanes Helene and Milton, according to a February council resolution in the packet.

What the loan would build

The city says its water system “is highly vulnerable to failures and operational interruptions resulting from flooding and other natural disasters.” The weak points it names are a lack of stored treated water, water main breaks and failing electrical equipment.

The projects come from the city’s Drinking Water Master Plan:

  • a 2-million-gallon ground storage tank at the Greater Hills water treatment plant
  • full-size high-service pumps in place of the smaller “jockey” pumps at the Greater Hills and Sunburst Lane plants
  • about 4,000 feet of 12-inch water main on Johns Lake Road, from C.W. Harrell Road and Sunburst Lane to Friendship Road
  • about 6,500 feet of 12-inch main along State Road 50, from the east elevated storage tank to the Greater Hills plant
  • a 300-kilowatt backup generator for Well No. 4 and the east elevated tank
  • a natural gas standby generator at the Bloxam elevated tank

The city says the generator for Well No. 4 is 25 years old, with a fuel tank that “has rusted through.” It backs up a supply well and the communications link for the whole west water system and much of the east.

Bar chart of the contingent costs in Clermont's state water loan: construction $12 million, design $1.44 million, contingencies $1.2 million and technical services after bid opening $0.72 million.
Most of the loan would go to construction. Chart by Clermont Post
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The terms

Staff listed the main terms:

  • up to $15,360,000 for design, construction and related costs
  • 50% of the principal forgiven
  • zero interest
  • semiannual payments of up to $195,900, starting in November 2027

The agreement sets a 20-year term and a $6,000 loan service fee. Repayments would come from the city’s Water Fund, staff said.

The agreement also separately approves $300,000 for planning, half of it forgiven. The construction money stays “contingent” until the state approves the projects. The city must finish planning by May 15, 2027.

What it means for you

The city says the work would make the water system less likely to fail in storms and less exposed to main breaks. The agreement sets dates for planning only. It does not give construction dates.

Because half the loan is forgiven and it carries no interest, the city would repay about $7.68 million for $15.36 million of work. The staff report does not say whether water rates would change.

The council meets at 3 p.m. Tuesday at City Hall, 685 W. Montrose St. The loan is on the consent agenda. Also on the agenda: a proposed e-bike ban on downtown and waterfront trails and sidewalks and a grant for 18 firefighters.

To report a water main break, our who to call at City Hall page has the city’s utility numbers. Our power outages page covers what to do when storms knock out service.