I don’t have a copy of the NEC in front of me but in my opinion if the underground water pipe is not part of the structure with the service you don’t have to use it. If the separate building has a metal underground pipe it should be used as part of the grounding electrode system of that building and connected to the EGC in the service disconnect for that building.
Curt, I could be wrong, but I don't think we are talking about a second building in the original post. Look at the second post by the original poster. Don
When you said pedestal I was picturing the meter/main mounted remote from the dwelling. Somehow even though Don told me to look at your second post I missed it but saw it after making my last reply. I’m having one of those days.