Hey Blue dog,
The way I see it is CGFI has asked to replace the water line. DRMS would ok it, but they can't /won't because the lime originates at a water main on the other side of someone else's property. So DRMS says they can't approve that item because it encompasses work off the POW site. (on the other guy's land)
It seems to me that this is not a big problem. It may be as simple as asking the neighbor to run a line across their land to the edge of their property, and pay them to have the work done. It may not even be necessary to involve the DRMS in that part of the job. Then CGFI asks DRMS for permission to run the line across POW land.
Simple solution, but you know when it involves government bureaucracies, simple is not usually the order of the day!
I don't think it's a real big deal. They will figure it out.
Good question, & GLTY!