Item description:

Run (Hold R2) to the right past the ostrich and keep going forward
past a few trees in the center until you get to the waterfall

Interact with the ladder beside the wheelworks to begin the puzzle

There are four levers controlling the four waterways

You want the two in the middle to be releasing fresh water,
while closing the topmost and bottommost waterways

Completely close the top and bottom waterways, and then fully extend
the lower-middle waterway. Only extend the upper-middle waterway at
a 45 degree or so angle (halfway) so that it is partially open
!! When you get the angle, don't forget to release the X button !!

If you get a cutscene of Kate smiling, you did it right