It appears to me that you have a code violation no matter how you terminate the smaller wire. Until you go through a service disconnect, the grounded conductor (neutral) and the grounding conductor are the same wire. Since you appear to have a large enough neutral, the smaller conductor should not have been run. You would not need it and it would be in parallel with the neutral.
Question- How is the smaller conductor terminated at the meter? and How is the other building being fed?
[This message has been edited by George Little (edited 07-19-2005).]
