My great-great-great grandfather, Daniel Buckley Funk, is the guy who made the lake. Here's the story from Family Search.
(https://familysearch.org/photos/stories/2975066)

He had long realized the need of recreation for the isolated hard working people of this section and had in mind a pleasure resort built around a body of water. He had talked with Pres. Brigham Young about a little valley in the hills six miles south of Manti, which Chief Arrapeen and tribe made their winter home. This spot was a natural lake bed, but had no water. However, Six Mile Canyon Creek ran just to the south, and with Daniel’s knowledge of surveying he could overcome that problem.

As was usual in matter of consequences, he sought the council of Brigham Young and through his help and influences with the Indians Daniel acquired a deed for the property, signed by Chief Arrapeen.

Pleased with his success so far, construction work soon began. With the help of his boys a large levee was built and a ditch along the north wall of Six Mile Canyon made. Now the “big moment,” for the Indians had arrived. They were filled with misgivings and expected to laugh at the white man trying to make water run uphill, as it appeared to them.

The route the water had to take was even harder and seemed impossible to many people, especially the Indians who were watching the progress of the project with great interest. Because of the lay of the land it looked like Daniel was trying to bring the water uphill. Actually he had taken his stream out of the creek far enough up the canyon that it had the proper fall as he brought it along the north side of the canyon, over the brow of the hill, and into the valley. But he met with many obstacles.

About mid-way between the Arrapeen Valley and the point from which the water was to be taken from the creek was a large ledge of solid stone. Here was a difficulty, for his survey showed that the ditch must pass through the center of this huge rock, or along it’s side, midway up. After careful study, Mr. Funk overcame this difficulty by fastening iron hooks in the face of the ledge to which he hung a wooden flume. A few years later, when the flume collapsed, he dug a ditch through the solid rock.”

The Indians watched, and waited, and shook their heads in disbelief. “Water no go up hill,” they said. “Dan Funk beeg man, but no can do.”

When the water was turned in to the ditch and flume, it went coursing along its way uphill as it seemed, over the ridge and into the dry valley. There it rapidly sank! The dry ground drank up the water as fast as it ran through the ditch. Were all of Daniel’s efforts and dreams going to be in vain? Gradually, as the parched earth became saturated, the lake began to form. It grew until it covered 75 acres of the Indian Valley to a depth of 20 or more feet in the center. The water glistened like an emerald gem. Now Daniel had to provide the proper setting for this jewel. This was the year 1873, and the newly formed lake was appropriately called “Funk’s Lake”.

The ditch and dam made, partly in solid rock, to divert water form Six Mile Creek to this valley, is evidence that he was an outstanding engineer.

Now Daniel’s whole time and energy must be spent on his own little world. Water was carried around the sunny slopes where the groves of trees must grow, (they planted 6,500 shade and fruit trees) foliage, drops and gardens. Melons and even sugar cane thrived, the latter was made into a fine grade of Molasses.

A temporary home was made in the side of the hill to the West, there soon followed two others on the crest, where the view of the whole countryside was magnificent. The families were moved to the lake and his town property sold. The hay farm was leased to his son, Ezra, who operated it as long as Daniel lived.

He stocked the lake with fish and built row boats for the coming crowds. A willow bowery was made for gatherings, and after a dancing pavilion on the broad levee, and still later another a short distance out on the water.

The Sanpete Valley branch railroad had reached Manti, and from here they built a spur to the Morrison Coal Mine. This track was short distance south of the resort. Arrangements were made with the company to run excursions at intervals, which brought hundreds of people from points north, accompanied by bands and orchestras. These were truly festive occasions. Row-boats no longer filled the demand for a means to get on the lake. In spite of warnings by the management, they were frequently over crowded on the boats. The only accident ever to occur at the resort was from this source, when a boat capsized in a storm and eleven people were drowned. This was a blow to Mr. Funk, but was not to be daunted. He secured the help of a skilled mechanic who had come from Europe, and together they built a sturdy, but picturesque steam boat, powered by a special engine, with capacity for seventy passengers. This was safe and very popular.

A sand beach in a secluded spot was provided, with lockers and bathing suits, so bathing and swimming were enjoyed.

Funk harvested and stored ice, and was the first to manufacture ice-cream and sell it, which was a rare treat at that time. A booth was near the pavilion where refreshments were served with ice cold soft drinks.

“Funk’s Lake” was now a noted pleasure resort, but Daniel constantly planned further improvements, but on 20 Dec. 1888 while on the road from Manti with a load of lumber, his life was cut short by a heart attack, closing the earthly career of one of the most valiant, sturdy Pioneers of Utah.
The following is from the “Song of the Century-History of Manti”

Funk also built a dam across the south end of Arrapeen Valley, which made Funk’s Lake, now called Palisade Park. The ditch he made, partly in solid rock to divert water from Six Mile Creek to this valley is evidence that he was an outstanding engineer. Funk also harvested much ice for sales, made cooking and laundry starch from potatoes, baking powder from saleratus, alum, paint from local rocks, tar and charcoal from pinion pine, and cooking utensils from iron which he smelted from local ores. He made several boats, the largest one powered with a vertical steam engine which could carry seventy persons at one load. Many people from Central Utah had their first steamboat ride in this boat floating on Sapphire hued and tree ringed Funk’s Lake on the top of a mountain.