I did that quest, but I killed the guy in the mine and ran for it. Got rewarded by another guy upon existing the place with a nice ring and the only place guards would bug was inside the temple of talos, where the same trio would still wait for me and attempt an arrest immediately.
I suppose it's too late for you to reload a past save? You should always, always have save files all over the place, before you do something, after you do something, in middle of something and outside everything and inside everything (you get the point).
You *might* be able to kill everything inside the city and hope the bounty goes away that way, but by all means save before trying that! :angel: