This ISTS Managed System Agreement (“Agreement”) is made this _____ day of _______________, 20__ between the Crane Lake Water & Sanitary District, a public corporation and political subdivision organized under the laws of the State of Minnesota, (hereinafter “the District”) and _______________________and __________________, [a single person/married to each other] (the “Landowner”) in response to the following situation:

A.        Landowner desires to obtain waste water disposal and treatment services through an individual sewage treatment system to be designed, constructed and owned by the District pursuant to the terms of this Agreement.

B.         The District is willing to provide such services pursuant to the terms and provisions of this Agreement.

Now, therefore in consideration of the mutual covenants, promises and agreements herein contained, it is hereby understood and agreed by the District and Landowner as follows:

1. Definitions.  The following terms and phrases shall have the meanings given them in this Section unless the context clearly requires otherwise.

1.1.            “Access Easement” means the perpetual easement granting the District the right of ingress and egress over Landowner’s Property as is more fully described in Section 5 of this Agreement.

1.2.            “Agreement” has the meaning given above.

1.3.            “Building” means the structure(s) on Landowner’s Property that contains habitable space and that will be connected to the ISTS Service System.

1.4.            “Building Drain” means that part of the lowest horizontal piping of a drainage system which receives the discharge from soil, waste, and other drainage pipes inside the walls of a Building and conveys it to the Building Sewer, beginning 5 feet (1.5 meters) outside the inner face of the Building wall.

1.5.            “Building Sewer” means the extension from the Building Drain to the ISTS Service System.

1.6.            “Certificate of Completion” means the Certificate of Completion with a final as‑built drawing of the Permanent ISTS System attached that will be provided to Landowner by District pursuant to Section 5 of this Agreement.

1.7.            “District” means the Crane Lake Water & Sanitary District, a public corporation and political subdivision organized under the laws of the State of Minnesota.

1.8.            “Easements” mean the Permanent ISTS Easement, Access Easement, Temporary ISTS Construction Easement and the Future Easement.

1.9.            “Future Easement” means the future easement needed for the ISTS Service System as further described in Section 5 of this Agreement.

1.10.        “Individual Sewage Treatment System or ISTS” – means an arrangement of devices or structures for treating or holding domestic or non-domestic wastewater approved for use by applicable regulations of the State or County.

1.11.        “ISTS Service System” means all equipment, materials and appurtenant items installed by the District that are part of an individual sewage treatment system serving the Landowner’s Property, which may include but are not limited to a Septic Tank, Control Panel, Grinder Pump Manhole, electrical connections to the Grinder Pump and/or Control Panel, the Leachage Field and other appurtenant items.

1.12.         “Landowner” has the meaning given above.

1.13.         “Landowner’s Property” means the real estate located in St. Louis County, State of Minnesota legally described on Exhibit A attached hereto.

1.14.        “Leachage Field” means the area to which effluent is distributed from a Septic Tank or other component of the ISTS Service System. This can either be an area of the Landowner’s Property or a mound control on the Landowner’s Property.

1.15.        “Permanent ISTS Easement” means the perpetual easement granted by Landowner to the District for the ISTS Service System as further described in Section 5 of this Agreement.

1.16.        “Permanent ISTS Easement Area” means that portion of Landowner’s Property on which the ISTS Service System is located and extending fifteen feet (15′) from all sides of all parts of the ISTS Service System including, but not limited to, fifteen feet (15′) from all sides of the Leachage Field.

1.17.        “Septic Tank” means any tank or other storage facility in which sewage is collected and held.

1.18.         “Temporary ISTS Construction Easement” means the easement granted by Landowner to allow room for the construction of the ISTS Service System as further described in Section 4 of this Agreement.

1.19.        “Temporary ISTS Construction Easement Area” means that portion of Landowner’s Property depicted on Exhibit B attached hereto.

1. Design and Construction.  The ISTS Service System shall be designed to provide sewage treatment for normal and customary sewer flow for the use described in the Landowner’s application.

1. ISTS Service System.  The District shall construct, operate, maintain, own and replace, subject to the limitations and requirements set out in its ordinances, rules and regulations and all other applicable laws, rules and regulations now in force or as hereafter amended or adopted, the ISTS Service System constructed on Landowner’s Property.

1. Temporary ISTS Construction Easement.  Landowner hereby grants an easement to the District, its agents and employees, with necessary equipment to enter upon and have access to the Temporary ISTS Construction Easement Area for the purpose of construction work relating to the ISTS Service System and to carry out the purposes of this Agreement.  The Temporary ISTS Construction Easement will continue in force and effect for two (2) years after the date of this Agreement.

1. Grant of Perpetual Easements.  Landowner hereby grants to the District, its successors or assigns, a right-of-way and perpetual easement to erect, construct, install and lay, and to thereafter own, use, operate, inspect, repair, maintain, change the size of, replace, move and remove, the ISTS Service System and appurtenant facilities within the Landowner’s Property on the Permanent ISTS Easement Area as finally located and determined by the Certificate of Completion and Landowner further grants to the District the right of ingress to and egress over Landowner’s Property to the ISTS Permanent Easement Area and across Landowner’s Property by means of roads and lanes on Landowner’s Property as and if they exist, otherwise, by such road, roads or paths as shall occasion the least practical damage and inconvenience to Landowner and the right to enter into buildings on Landowner’s Property to carry out the purposes of this Agreement.  The preliminary construction drawing attached hereto as Exhibit B shows the proposed location of the ISTS Service System.  A Certificate of Completion with a final as-built drawing of the Permanent ISTS System attached to the Certificate of Completion will be provided to Landowner and the St. Louis County Environmental Services Department and will be recorded by the District with the appropriate land title recording office upon completion of construction and installation of the ISTS Service System.  Landowner agrees to grant the District all future easements needed for the ISTS Service System across, over or under Landowner’s Property at such locations as mutually determined by the Landowner and the District.  Landowner further grants to the District the right to remove trees, shrubs, herbage, and vegetation located within the Easements.  Landowner agrees not to construct or to permit the construction of any structure over the ISTS Service System and to not carry on any excavation, installation, construction or other activity over, within or under the ISTS Permanent Easement Area or Future Easement without the prior written consent of the District or to plant or to permit the planting of any shrub or tree over the ISTS Service System.  Landowner acknowledges and agrees that District will not be obligated to obtain or provide legal descriptions specifically describing the location of the Easements granted herein. If Landowner desires to obtain specific legal descriptions, then Landowner must pay the cost of obtaining such legal descriptions.

1. Building Drain, Building Sewer and Electrical Service.  The Landowner agrees to install, at its expense, the Building Drain and Building Sewer to connect the Building to the ISTS Service System.  Any necessary repairs or modifications within the Building and to the outside of a Building must be accomplished by, and at the expense of, Landowner.  Landowner further agrees that if electrical power is necessary to operate any component of the ISTS Service System on Landowner’s Property, the electrical power shall be provided by and at the expense of Landowner.  Any necessary upgrades to Landowner’s electrical service shall be accomplished by Landowner at Landowner’s expense.
2. Existing Private Treatment Systems.  The District will accomplish the lawful closing and abandonment of any existing private treatment system now located on Landowner’s Property that is replaced by the ISTS Service System provided under this Agreement. Landowner agrees to cooperate with the District personnel in the location, closing, and abandonment of the private treatment system and grants to the District the right to enter upon Landowner’s Property and to accomplish such excavation or other actions that are necessary to lawfully close and abandon the private treatment system.
3. Restoration.  Following the installation of the ISTS Service System and closure of the private treatment system, the District shall rough grade all disturbed areas of Landowner’s Property, but will leave soil mounded over trenches to provide for natural settlement and so as to provide minimal cleanup. Final grading, seeding, sodding, and replacement of plantings shall be accomplished by, and at the expense of, Landowner. Any damage to existing concrete sidewalks, walkways, or driveways shall be repaired by, and at the expense of, the District.
4. Fees.  Landowner agrees to pay to the District the rates and charges provided by District ordinances as amended from time to time, including but not limited to the following fees:

9.1.            “ISTS Monthly Service Fee” which shall be set by the District on an annual basis for the use, operation, maintenance, administration, and other costs incurred by the District and associated with ISTS Service Systems.  The ISTS monthly service fee will begin on the first day of the first month after the Certificate of Compliance is provided to Landowner.

9.2.            Landowner agrees to pay to the District a one-time sewer access charge of $7,500.00 for the cost to construct the ISTS Service System. The $7,500.00 shall be paid in cash upon the execution of this Agreement or pursuant to a sewer service agreement if permitted by the District.

1. Change of Use.  Landowner may not change the use of Landowner’s Property from that set forth in Landowner’s Application for ISTS Managed System to a use that would increase the sewage required to be treated on Landowner’s Property or add any bedrooms or bathrooms on Landowner’s Property without the prior written consent of the District. Landowner shall be obligated to pay for the cost of any upgrades or changes to the ISTS Service System that are required due to the change of use or addition of bedrooms or bathrooms.
2. Cost Cap.  The total amount that the District will pay for the cost of the initial ISTS Service System will not exceed $30,000.00, including the $7,500.00 sewer access charge. If the bid for the construction of the ISTS Service System exceeds $30,000.00, then within 45 days the Landowner shall either (i) cancel this Agreement and neither Landowner nor the District will have any further obligations under this Agreement or (ii) deposit with the District an amount equal to one hundred twenty-five percent (125%) of the amount by which the bid exceeds $30,000.00 which funds the District will utilize to pay construction costs in excess of $30,000.00. If such deposit is made, then Landowner will be obligated to pay for any construction costs in excess of $30,000.00 (even if the costs exceed the bids) and the District shall proceed to construct the ISTS Service System in accordance with the terms of this Agreement. Upon completion of the ISTS Service System and delivery of the Certificate of Completion, District will refund any unexpended amount of the deposit made by Landowner pursuant to this Section 11 or will provide Landowner with an invoice for any cost of construction that exceeds the amount of the deposit. Landowner shall pay such invoice to District within thirty (30) days of receipt.
3. Storm and Surface Water Discharge.  Landowner shall not cause or permit the discharge of any roof downspout, exterior foundation drain, or other source of surface runoff or groundwater, or uncontaminated cooling water or unpolluted industrial process waters, to be discharged into the ISTS Service System.
4. Other Prohibited Discharges.  Landowner shall not cause or permit to be discharged into the ISTS Service System any of the following or any other substances prohibited by District ordinance or other applicable laws:

13.1.    Any gasoline, benzene, naptha, fuel oil or other flammable or explosive liquid, solid, or gas.

13.2.    Any waters or wastes containing toxic or poisonous solids, liquids, or gases in sufficient quantity, either singly or by interaction with other wastes, which inure or interfere with the sewage treatment process, constitute a hazard to humans or animals, create a public nuisance, or create any hazard in the receiving waters of the sewage treatment plant.

13.3.    Any waters or wastes having corrosive property capable of causing damage or hazard to structures, equipment, and personnel of the sewage works.

13.4.    Solid or viscous substances in quantities of such size capable of causing obstructions in the ISTS Service System or other interference with the proper operation of the ISTS Service System, such as, but not limited to, ashes, cinders, sand, mud, straw, shavings, metal, glass, rags, tar, feathers, plastics, wood, unground garbage, whole blood, paunch manure, hair and fleshing, entrails and paper dishes, baby wipes (including “flushable wipes”), cups, milk containers, etc. Residential garbage grinders (disposals) may be used in accordance with the manufacture’s recommendations.

13.5.    Any other items not permitted to be discharged by applicable law into ISTS, including those items prohibited by District Ordinance No. 1.

13.6     Flows into the ISTS Service System of such quantity capable of causing the ISTS Service System to be overloaded or that causes obstructions in the ISTS Service System or interference with the proper operation of the ISTS Service System. In this regard, Landowner acknowledges and understands that the ISTS Service System has been designed to accommodate normal flow from the uses, number of bathrooms and bedrooms described in Landowner’s Application for ISTS Managed System and that any changes in those uses or number of bathrooms or bedrooms will be deemed to be the cause of the flows prohibited by this Section 13.6.

1. Inspection.  The District shall have the right to inspect the Landowner’s Property at reasonable times to confirm compliance with this Agreement.
2. Transfer and Assignment.  The Permanent ISTS Easement, the Access Easement and the Future Easement granted in this Agreement shall be perpetual and the Permanent ISTS Easement, the Access Easement, the Future Easement, and the Temporary ISTS Construction Easement and all other rights granted in this Agreement shall run with the land and shall be binding upon the heirs, successors and assigns of the parties.
3. Regulations.  Landowner agrees to comply with the ordinances, bylaws, rules, and regulations of the District and any applicable resolutions and applicable law and all other rules and regulations presently existing or hereafter enacted concerning the operation and use of the ISTS Service System. In the event any term or provision of this Agreement is inconsistent with any ordinance, by law, rule or regulation of the District or County or other applicable law whether now or hereafter in effect, the term or provision of the ordinance, by law, rule or regulation shall govern.
4. Breach; Non-Payment.  If Landowner violates any terms or provisions of this Agreement or fails to timely pay fees or amounts required to be paid, the District may, at its option:

17.1.    Impose a penalty of 10% of any amount that is not paid within ten (10) days of its due date; and/or

17.2.    Disconnect the ISTS Service System from any Building if any amount is not paid within thirty (30) days of the due date or if Landowner is in violation of any term of this Agreement and has not remedied such violation within thirty (30) days after notice of such violation was mailed or otherwise given to Landowner.  Following disconnection, the District shall immediately advise the St. Louis County Environmental Services Department that Landowner’s property is no longer serviced by the ISTS Service System. A reconnection charge in an amount as set forth by the District in its Ordinance No. 3 now in effect and as it may be amended from time to time by the District, will be imposed in order to restore the connection to the ISTS Service System; and/or

17.3.    Certify the delinquent amount(s) due to the St. Louis County Auditor to create a lien against Landowner’s Property to be collected in the same manner as real estate taxes; and/or

17.5.    Commence legal action against Landowner to seek a judgment for the delinquent amount and court costs; and/or

17.6.    Exercise any and all other legal rights available to the District to enforce the terms and provisions of this Agreement.

17.7     Landowner acknowledges and understands that District is utilizing funds provided to it by State grants to pay for the cost of construction the ISTS Service System and that there are conditions on the grants with which the District must comply. If, as a result of a default by Landowner and/or the exercise of any remedy under this Agreement by the District, the District is required to repay any funds utilized by the District to construct the ISTS Service System, then Landowner shall be obligated to reimburse the District for any amounts required to be repaid to the funding source.

17.8     Landowner acknowledges and agrees, in addition to any other remedies available to the District under this Agreement or otherwise, that the provisions of Article XII, Penalties, of District Ordinance No. 1 now in effect and as it may be amended from time to time by the District, shall be applicable to Landowner the ISTS Service System and otherwise with respect to this Agreement.

1. Voluntary Agreement.  This Agreement was entered into by Landowner voluntarily and not pursuant to any procedures or laws applicable to the acquisition of property by governmental bodies by eminent domain. Accordingly, the provisions of Chapter 117 of the Minnesota Statutes are not applicable to this Agreement and the grant of the Easements made by Landowner to the District herein. In this regard, Landowner expressly acknowledges and agrees that the obligations of the District hereunder are sufficient and adequate consideration for the Landowner’s grant of the Easements hereunder. Landowner further acknowledges, understands and agrees that the District’s obligations hereunder will cease and be of no further force and effect if Landowner seeks to obtain payment or compensation for any Easements granted hereunder or if the Landowner or any successor in interest to the Landowner, including any mortgagee, demand that the District specifically describe the Easements or other challenge the existence of the Easements. In such event, District shall be entitled to exercise the remedy provided to it under Section 17.2 hereof and the provisions of Section 17.7 shall also be applicable.
2. Benefit to Landowner.            Landowner acknowledges and agrees that the ISTS Service System significantly benefits Landowner’s Property and that such benefits exceed the value of the Easements granted to the District by Landowner pursuant to this Agreement.
3. Obligations of District/Fees.   The obligations of the District to install and maintain the ISTS Service System contained in Sections 3 and 5 hereof and the fees and charges for connection, use, operation, maintenance, debt service, administration and other costs of ISTS Service System and the conduct of the business of the District are subject to change by action of the Board of Managers of the District from time to time.

[signatures appear on next page]

In witness whereof, the Landowner(s) has caused this ISTS Managed System Agreement to be executed on the date first above-written.

                                                                                    Landowner:

____________________________________

[Sign Name]

____________________________________

[Sign Name]

State of Minnesota        )

)  ss.

County of St. Louis        )

On this _____ day of ___________, 20__, before me, a notary public within and for said County, personally appeared ________________________________________, to me known to be the person(s) described in and who executed the foregoing instrument and acknowledged that he/she/they executed the same as his/her/their free and voluntary act.

(Notary Stamp)

____________________________________

Notary Public

In witness whereof, the District has caused this ISTS Managed System Agreement to be executed on the date first above-written.

                                                                                    District:

                                                                                    Crane Lake Water & Sanitary District

By_________________________________

Its Authorized Officer

State of Minnesota        )

)  ss.

County of St. Louis        )

The foregoing instrument was acknowledged before me this _____ day of ________________, 20__, by ____________________ the ____________________ of the Crane Lake Water & Sanitary District and on behalf of the Crane Lake Water & Sanitary District.

____________________________________

Notary Public

This instrument was drafted by:

Steven C. Overom

Maki & Overom, Ltd.

31 W. Superior Street

Suite 402

Duluth, MN 55802

Exhibit a

Legal Description of Landowner’s Property

Exhibit B

Drawing of Proposed Location of

Permanent ISTS Easement and Temporary ISTS Construction Easement

And Leachage Field