When I bought the house (sitting on a hill sloping down from left to right,) the rain water was already running off starting from the left neighbor's front yard to his backyard, to my backyard, to the back neighbor's yard, to the right neighbor's backyards, and to his front yard before ending up in the public drain in front of his house. The water also flows away from my house to my backyard. I am the only lot left with large shady trees, thus the only lot with no grass, only mulch. The heavy summer rains would frequently wash off the mulch causing erosion along my yard.

It looks like a shallow swale covered with rocks from left to right may do the trick to slow down the water runoff preventing further erosion. However, swales usually guide storm water to a public drain or a pond. Where do I have my swale divert water to? Where does the swale end at? I cannot divert it directly to the back neighbor's yard or the right neighbor's yard (even though the water already naturally flows that way.) I cannot divert it uphill toward my front yard. Do I just dig a water garden at the end of my yard by the bordering fence? Try to grow some grass by the border fence and divert water to the grass?