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+# Logging Improvements Design
+
+## Overview
+
+Improve MCP server logging to provide meaningful operational visibility. Replace generic HTTP request logs with application-level context including agent identity, tool usage, document access, and operation stats.
+
+## Current State
+
+Logs show only uvicorn HTTP requests with no application context:
+```
+INFO:     172.20.0.2:43254 - "POST /messages?session_id=... HTTP/1.1" 202 Accepted
+INFO:     127.0.0.1:41508 - "GET /health HTTP/1.1" 200 OK
+```
+
+## Desired State
+
+Human-readable single-line format with full context:
+```
+2025-01-02 10:15:23 | dev-agent (abc...xyz) | get_records | sales | 42 records | success | 125ms
+2025-01-02 10:15:24 | dev-agent (abc...xyz) | update_records | sales | 3 records | success | 89ms
+2025-01-02 10:15:25 | dev-agent (abc...xyz) | add_records | inventory | 5 records | error | 89ms
+    Grist API error: Invalid column 'foo'
+```
+
+## Design Decisions
+
+| Decision | Choice |
+|----------|--------|
+| Log format | Human-readable single-line (pipe-delimited) |
+| Configuration | Environment variable only (`LOG_LEVEL`) |
+| Log levels | Standard (DEBUG/INFO/WARNING/ERROR) |
+| Health checks | DEBUG level only (suppressed at INFO) |
+| Error details | Multi-line (indented on second line) |
+
+## Log Format
+
+```
+YYYY-MM-DD HH:MM:SS | <agent_name> (<token_truncated>) | <tool> | <document> | <stats> | <status> | <duration>
+```
+
+**Token truncation:** First 3 and last 3 characters (e.g., `abc...xyz`). Tokens <=8 chars show `***`.
+
+**Document field:** Shows `-` for tools without a document (e.g., `list_documents`).
+
+## Log Levels
+
+| Level | Events |
+|-------|--------|
+| ERROR | Unhandled exceptions, Grist API failures |
+| WARNING | Auth errors (invalid token, permission denied) |
+| INFO | Tool calls (one line per call with stats) |
+| DEBUG | Health checks, detailed arguments, full results |
+
+**Environment variable:** `LOG_LEVEL` (default: `INFO`)
+
+## Stats Per Tool
+
+| Tool | Stats |
+|------|-------|
+| `list_documents` | `N docs` |
+| `list_tables` | `N tables` |
+| `describe_table` | `N columns` |
+| `get_records` | `N records` |
+| `sql_query` | `N rows` |
+| `add_records` | `N records` |
+| `update_records` | `N records` |
+| `delete_records` | `N records` |
+| `create_table` | `N columns` |
+| `add_column` | `1 column` |
+| `modify_column` | `1 column` |
+| `delete_column` | `1 column` |
+
+## Files Changed
+
+| File | Change |
+|------|--------|
+| `src/grist_mcp/logging.py` | New - logging setup, formatters, stats extraction |
+| `src/grist_mcp/main.py` | Call `setup_logging()`, configure uvicorn logger |
+| `src/grist_mcp/server.py` | Wrap `call_tool` with logging |
+| `tests/unit/test_logging.py` | New - unit tests for logging module |
+
+Tool implementations in `tools/` remain unchanged - logging is handled at the server layer.
+
+## Testing
+
+**Unit tests:**
+- `test_setup_logging_default_level`
+- `test_setup_logging_from_env`
+- `test_token_truncation`
+- `test_extract_stats`
+- `test_format_log_line`
+- `test_error_multiline_format`
+
+**Manual verification:**
+- Run `make dev-up`, make tool calls, verify log format
+- Test with `LOG_LEVEL=DEBUG` for verbose output