Crane Lake is part of a high-quality, intricate lake system and is a tributary to outstanding resource waters shared by the United States and Canada. Six rare and ecologically sensitive resources are known to be located in the Crane Lake vicinity.

Early settlement of the area proved very challenging. Crane Lake, distant from larger communities and settlements, was considered the edge of the wilderness. The Crane Lake economy has for a century been driven by natural resources through fishing; tourism; and federal, state and local timber harvesting and management as well as international border management. Many generations of residents have settled, raised families and earned a living from the natural resource base of the area.

Currently all residences and businesses on and around Crane Lake are served by Individual Sewage Treatment Systems (ISTS). The systems vary in age and include seepage pits, septic systems (at-grade or mound systems), holding tanks, composting toilets, incinerating toilets, privies and gray water filters. The St. Louis County Health Department has determined that the majority of the ISTS in the Crane Lake area are not functioning properly. Some systems within the area do not meet Minn. Rule .7080, which regulates on-site systems. Causes for not meeting the requirements include improperly designed drain fields, inadequate design capacity, insufficient vertical separation between the drain field and high-ground water levels, and improperly constructed septic tanks. Poor receiving soils and inadequate drain fields have resulted in the inadequate treatment of wastewater. Inadequate wastewater treatment has resulted in public health concerns, limited community development and the creation of conditions that may potentially be harmful to the community, environment, groundwater and Crane Lake.

In 1994, St. Louis County formed the Crane Lake Water and Sanitary District (District) and elected a local Board of Managers to address water and wastewater issues in the Crane Lake area. The District is organized under the laws of the State of Minnesota and has authority much like any Minnesota small city, empowered to make and implement matters of public policy and levy taxes to support its operation. Five managers comprise the "Board of Managers" (Board). The Board is appointed by the St. Louis County Board and has specific terms. Residency within the District is required to become appointed to the Board.

The District is divided into two sub-areas, the Western Service Area and the Eastern Service Area.