A cutting tool has a holder block and a sleeve. The sleeve includes a shank and an enlarged flange at an end of the shank. The sleeve shank is received in a hole in the holder block, with the flange against a surface of the holder block and the sleeve shank facing the holder hole wall. A first fillet extending between the holder bore wall and a second fillet extending between the sleeve shank and sleeve flange cooperatively form an annular flow passage for flow of water from the holder into the sleeve.