-snip-

So, in my defense, I never built a fence at the bottom of a three foot
wall -- it was like that when I got there (in fact I'm not sure if
the fence is the legal property boundary, or the retaining wall is...
It could be that the fence was built by the neighbors in behind on
their property -- I'll have to figure that out before making any final
decisions). As far as budget/timeline goes, as cheap and quick as
possible, without sacrificing longevity. I'm in Ottawa, where we
normally get a LOT of snow (though this year we donated some to our
pals down south...)

I like the idea of moving the wall back, and planting the fence into
the new retaining wall, though somehow I don't think it will fly with
one of the neighbors in particular. Natural slope is not an option,
and even if it was, I don't think I'd go for it (loss of usable space,
lawn mower woes, etc). Drainage is a factor, and I will plan
carefully for that. Since we're changing the fence, we will likely
have cement truck access to the whole thing, but I'm a little worried
about how well the cement will weather over time. Dry blocks is
starting to sound good, though if I recall they're quite pricey.

Thanks for all the suggestions

John