Central Oregon Landwatch filed a lawsuit trying to stop the project.
Bend Mayor Jim Clinton says the water project has been very contentious over the last year.
He believes if they had heard and addressed citizen concerns better -- a lot of the controversy could have been avoided.
"And I think its fair to say had the city done that, we wouldn't be in the pickle we are right now. And I bear some responsibility. If the city staff had reached out to everybody and made it more of a community decision about the future of the water supply instead of a city project."
Clinton is meeting with leaders of the Central Oregon Landwatch, the group that filed the lawsuit to stop the project.
He is efforting to reach some kind of middle ground -- so the project can go forward, while addressing their environmental concerns.