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A little water dripping out is normal. If you get a steady stream out of this hole, seal it with your finger and then let go. Repeat a few times and see if it stops leaking. This helps the new diaphragm seat itself. Please note the Senninger brand does not have this small relief port. Also try turning the system on and off a few times. If it is still leaking, check the water flow direction. If the water is flowing in the right direction and the above steps didn’t work, then the device is most likely defective. Another cause for leaking could be the placement of the pressure regulator within the head assembly. If you are using a timer, timer must be installed first, followed by the backflow preventer, the filter, and then the pressure regulator