Nightrider, we also had a diseased tree at the shoreline and we took it down (after taking pictures, just in case) We dug around the base a little so we could cut it at ground level and then covered it with mulch so it blended right in. No need to remove the roots since they will decompose over time.
I didn't bother going through any permit process because anyone could see it was dead and had the pictures to prove it.
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