diff --git a/Cargo.lock b/Cargo.lock
index 5a8f7fbb02ed8..32b5d65224009 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -4866,9 +4866,9 @@ dependencies = [
 
 [[package]]
 name = "k8s-controller"
-version = "0.10.0"
+version = "0.11.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "31f3b5a24a0a44317e69d8b536f823290725f1bd3eaa6d971c98a7cf995d1ed6"
+checksum = "a9a1ba25014e0459f311fb50ece23c42905be914b2eaf66ae801feb07a80847c"
 dependencies = [
  "async-trait",
  "futures",
@@ -4876,6 +4876,7 @@ dependencies = [
  "kube-runtime",
  "rand 0.9.4",
  "serde",
+ "serde_json",
  "thiserror 2.0.18",
  "tracing",
 ]
diff --git a/Cargo.toml b/Cargo.toml
index 39f0d1d7936ef..9c03d709e5243 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -381,7 +381,7 @@ itertools = "0.14.0"
 jemalloc_pprof = "0.8.2"
 jsonwebtoken = { version = "10.3.0", features = ["aws_lc_rs"] }
 junit-report = "0.8.3"
-k8s-controller = "0.10.0"
+k8s-controller = "0.11.0"
 k8s-openapi = { version = "0.27.0", features = ["schemars", "v1_32"] }
 kube = { version = "3.1.0", default-features = false, features = ["client", "derive", "openssl-tls", "runtime", "ws"] }
 launchdarkly-server-sdk = { version = "2.6.2", default-features = false }
diff --git a/src/orchestratord/src/controller/balancer.rs b/src/orchestratord/src/controller/balancer.rs
index 08f689a9360f6..54f8413a20617 100644
--- a/src/orchestratord/src/controller/balancer.rs
+++ b/src/orchestratord/src/controller/balancer.rs
@@ -8,6 +8,7 @@
 // by the Apache License, Version 2.0.
 
 use anyhow::bail;
+use k8s_controller::TraceMetadata;
 use k8s_openapi::{
     api::{
         apps::v1::{Deployment, DeploymentSpec, DeploymentStrategy, RollingUpdateDeployment},
@@ -554,6 +555,7 @@ impl k8s_controller::Context for Context {
         &self,
         client: Client,
         balancer: &Self::Resource,
+        _metadata: &mut TraceMetadata,
     ) -> Result<Option<Action>, Self::Error> {
         if balancer.status.is_none() {
             let balancer_api: Api<Balancer> =
diff --git a/src/orchestratord/src/controller/console.rs b/src/orchestratord/src/controller/console.rs
index fcfa01c653317..c4571c3c26871 100644
--- a/src/orchestratord/src/controller/console.rs
+++ b/src/orchestratord/src/controller/console.rs
@@ -7,6 +7,7 @@
 // the Business Source License, use of this software will be governed
 // by the Apache License, Version 2.0.
 
+use k8s_controller::TraceMetadata;
 use k8s_openapi::{
     api::{
         apps::v1::{Deployment, DeploymentSpec},
@@ -582,6 +583,7 @@ impl k8s_controller::Context for Context {
         &self,
         client: Client,
         console: &Self::Resource,
+        _metadata: &mut TraceMetadata,
     ) -> Result<Option<Action>, Self::Error> {
         if console.status.is_none() {
             let console_api: Api<Console> =
diff --git a/src/orchestratord/src/controller/materialize.rs b/src/orchestratord/src/controller/materialize.rs
index 63cc5648dbed0..1a6c76cae3fb6 100644
--- a/src/orchestratord/src/controller/materialize.rs
+++ b/src/orchestratord/src/controller/materialize.rs
@@ -15,6 +15,7 @@ use std::{
 
 use anyhow::Context as _;
 use http::HeaderValue;
+use k8s_controller::TraceMetadata;
 use k8s_openapi::{
     api::core::v1::{Affinity, ResourceRequirements, Secret, Toleration},
     apimachinery::pkg::apis::meta::v1::{Condition, Time},
@@ -273,6 +274,7 @@ impl k8s_controller::Context for Context {
         &self,
         client: Client,
         mz: &Self::Resource,
+        _metadata: &mut TraceMetadata,
     ) -> Result<Option<Action>, Self::Error> {
         let mz_api: Api<Materialize> = Api::namespaced(client.clone(), &mz.namespace());
         let balancer_api: Api<Balancer> = Api::namespaced(client.clone(), &mz.namespace());
@@ -888,6 +890,7 @@ impl k8s_controller::Context for Context {
         &self,
         _client: Client,
         mz: &Self::Resource,
+        _metadata: &mut TraceMetadata,
     ) -> Result<Option<Action>, Self::Error> {
         self.set_needs_update(mz, false);
 
diff --git a/test/orchestratord/mzcompose.py b/test/orchestratord/mzcompose.py
index 904a9cddb22c0..e6251b4de0444 100644
--- a/test/orchestratord/mzcompose.py
+++ b/test/orchestratord/mzcompose.py
@@ -101,7 +101,7 @@ def get_version(tag: str | None = None) -> MzVersion:
 
 
 def get_image(image: str, tag: str | None) -> str:
-    return f'{image.rsplit(":", 1)[0]}:{get_tag(tag)}'
+    return f"{image.rsplit(':', 1)[0]}:{get_tag(tag)}"
 
 
 def get_upgrade_target(
@@ -276,7 +276,7 @@ def render_kind_cluster_config() -> None:
         out_file.write(
             text.replace(
                 "$DOCKER_CONFIG",
-                os.getenv("DOCKER_CONFIG", f'{os.environ["HOME"]}/.docker'),
+                os.getenv("DOCKER_CONFIG", f"{os.environ['HOME']}/.docker"),
             )
         )
 
@@ -3432,7 +3432,7 @@ def post_run_check(definition: dict[str, Any], expect_fail: bool) -> None:
                         stderr=subprocess.DEVNULL,
                     )
                     if (
-                        f"ERROR k8s_controller::controller: Materialize reconciliation error. err=reconciler for object Materialize.v1alpha1.materialize.cloud/{definition['materialize']['metadata']['name']}.materialize-environment failed"
+                        f"ERROR reconciling object{{object.ref=Materialize.v1alpha1.materialize.cloud/{definition['materialize']['metadata']['name']}.materialize-environment"
                         in logs
                     ):
                         break