Okay, what is the right way to do this?

Okay, well for right now i have a pip squeak 4 ft chain link fence around my property. My land is pretty equally rectangle... I want to section off the back half, and make it escape proof from the dogs. We will get new neighbors sooner rather than later.

My Goal: To have a permanent kennel set up at the back of my property, butting to where my fence line is. Right now I have two 10 x10 kennels under my carport.

My property backs up to an easement with a drainage ditch... my problem is, when it rains,the drainage ditch rises and makes it half way through my back yard. The rear property line is 160 ft long per tax records, and it'll take me 140 ft to make each one of my dogs a 10 x 10 kennel. I want to raise and level my land from the incoming floods. I understand, that to do this it will require a retention wall of some sorts because I can see every year the back yard sloping a little more and a little more towards the easement, I want to rip out the chain link fence, and possibly lay it flat on the ground so that the dogs cannot ever dig out of new privacy fence. It would be nice to do a brick wall or something, but I really don't see that fitting into my budget.

1) What should I construct the retention wall out of? I originally thought of treated wood, but even that will wear after some time.

2) should the privacy fence be inside of the retention wall or behind it? Why?

3) what can I do about drainage from the kennels? Right now they are under my carport which gets poor drainage when I clean the kennels.

4) I want indoor/outdoor kennels, do you think I should build a semi permanent stucture on the back half of each kennel, or a permanent building which would take up more space, but then we have to think about the heating and cooling. I want half of the kennels cement, and the other half a nice grassy area, or if I decide to board dogs down the road should I just stick to cement?

Sounds like you need to consult some sort of engineering firm - not sure of the specific designation though. First thought that came to mind was something like the Army Corps of Engineers. Someone who knows about drainage and the like.

Probably the most economical approach for the retaining wall would be salvage railroad ties. They can last a long time even a sub-grade.

Your privacy fence should be anchored on the inside of the retaining wall mostly because you would have to take the post to the bottom of the wall on the outside making the material cost more. If you have running water at times you would also not have to worry about it getting washed away.

I would make a center drain with a slight slope like a shower drain. I would take this and empty into the easement area unless there are codes that prevent this.

I would pave the whole area and use astroturf instead if grass. I know if mine was in an area like this it would be dug up in no time.

The housing area is something you can decide on based on cost, and how much you are ready to spend.

Be sure to get any necessary permits and check for local codes before you start.