Thoughts
First it seems that both houses are served by a public utility (not a privately held well) and are sharing the same water meter? If that is the case, first I would ask...who has been paying the water bill since you purchased the house? It definitely sounds like the tap may have been legal when both properties were in the name of the trust, but now that your parcel is out of the trust the tap is illegal. I would start here first of all, as I bet water bills are pretty big in Arizona and if you have been paying the bill yourself.....you might be able to sue them for compensation. As for the water commission, take what they say as far demanding the water line be rerouted with a grain of salt. IF they have two separately owned parcels using the same tap and meter, then they want things changed. Two meters, to taps, and two parcels means more money for the commission. So they want a new line installed.....I would try to get them to fight the fight on their dollar, not yours.
The other thing I do question though....is your use of the word "co-op". Are you implying that you and your neighbors are in a co-op for utilities? A setup were you all share the cost of utilities in your parcel grouping. If so, by being in a "co-op" could mean you are in agreement with the lay of all utilities just by being in the "co-op".....I have seen this only a few times in my surveying career and it always made for a big mess, but I have seen it.
As for the easement, you may have to do some title work in regards to the wording of the trust. If both properties were in the name of the trust in 2004, then when the water lines were installed the trust could not give itself an easement. Then when your parcel was pulled out of the trust, the easement should have been created. Now there is one other matter.....You mention driveway which leads me to believe that the waterlines are in front of your house. Do the waterlines follow the edge of the driveway to the offending property? It could be that the waterlines fall in a right of way easement along this driveway back to the other property. Now some states only see a right of way as an easement for ingress and egress, while other states view it as an easement for ingress, egress, and utilities. I don't know how Arizona views this situation, but it is a path I would look into.
There are a lot of avenues that can be pursued, but there are a few thoughts to mull over.
First it seems that both houses are served by a public utility (not a privately held well) and are sharing the same water meter? If that is the case, first I would ask...who has been paying the water bill since you purchased the house? It definitely sounds like the tap may have been legal when both properties were in the name of the trust, but now that your parcel is out of the trust the tap is illegal. I would start here first of all, as I bet water bills are pretty big in Arizona and if you have been paying the bill yourself.....you might be able to sue them for compensation. As for the water commission, take what they say as far demanding the water line be rerouted with a grain of salt. IF they have two separately owned parcels using the same tap and meter, then they want things changed. Two meters, to taps, and two parcels means more money for the commission. So they want a new line installed.....I would try to get them to fight the fight on their dollar, not yours.
The other thing I do question though....is your use of the word "co-op". Are you implying that you and your neighbors are in a co-op for utilities? A setup were you all share the cost of utilities in your parcel grouping. If so, by being in a "co-op" could mean you are in agreement with the lay of all utilities just by being in the "co-op".....I have seen this only a few times in my surveying career and it always made for a big mess, but I have seen it.
As for the easement, you may have to do some title work in regards to the wording of the trust. If both properties were in the name of the trust in 2004, then when the water lines were installed the trust could not give itself an easement. Then when your parcel was pulled out of the trust, the easement should have been created. Now there is one other matter.....You mention driveway which leads me to believe that the waterlines are in front of your house. Do the waterlines follow the edge of the driveway to the offending property? It could be that the waterlines fall in a right of way easement along this driveway back to the other property. Now some states only see a right of way as an easement for ingress and egress, while other states view it as an easement for ingress, egress, and utilities. I don't know how Arizona views this situation, but it is a path I would look into.
There are a lot of avenues that can be pursued, but there are a few thoughts to mull over.