The group managing a Red River diversion project around the Fargo and Moorhead, Minnesota metropolitan area has signed an agreement to help a nearby city with costs for infrastructure that will be needed when the channel is built.

The Fargo-Moorhead Diversion Authority announced Wednesday that it has approved a deal with the city of Horace, located southwest of Fargo, to provide up to $5 million.

Horace is one of the areas most affected by an updated design that was needed in order to receive a permit from the Minnesota Department of Natural Resources. The new plan reduces the impact to Minnesota.

The diversion authority continues to deal with other legal challenges to the $2.8 billion project. The Buffalo-Red River Watershed District recently denied a permit and is contesting the DNR permit.