In Cortaro Water Users' Ass'n v. Steiner, 148 Ariz. 343, 714 P.2d 836 (App. 1985), the City of Tucson filed applications with the Arizona Department of Water Resources ("ADWR") to drill three new water wells on property it had acquired by quitclaim deed. Id. at 346, 714 P.2d at 838. The well-site property was located outside the city boundaries in a subdivision known as Peppertree Ranch, a portion of which was within the water service area of an irrigation district. Id. Over the irrigation district's objection, ADWR granted the city's well permit application. Id. The irrigation district then challenged in the superior court the issuance of the drill permits and sought an injunction prohibiting the city from pumping from an existing well on the property. Id. at 347, 714 P.2d at 840. The district alleged the city lacked authority to drill or pump water because Peppertree Ranch was outside the city's service area. Id. The superior court agreed, remanding the case to ADWR with instructions to revoke the well permits. Id. On appeal, this court affirmed the trial court's ruling that the well-site property was not in the city's service area. Id. at 349, 714 P.2d at 842. Applying the definition in 45-402(31), the Court stated that for the property to be in the service area, "Tucson must either have been actually serving water to Peppertree Ranch at the time it applied for the well permits or it must have contained an operating distribution system owned by Tucson. At the time it applied, Tucson had not fulfilled either requirement." Id.