Re: My new swamp
By all means, if you can use the neighborly approach as suggested by CaptTCB, you should definitely go that route. It will work out better for both you and your neighbor as well as your future relationship.
In lieu of that, the inspectors from the municipality clearly have their heads up their posteriors because it is supposed to be illegal to divert water from one property (your neighbor ) to another (yours ). If the best they can do is give you misinformation that sod will solve all your problems and don't you dare divert that excess water to their storm systems, they deserve to be named in the lawsuit as well. Diverting water to municipal systems is the preferred manner of handling excess water, that is what those systems are there for. What is not permissible is for erosion to be diverted to their systems, which shouldn't be an issue with a proper drainage system in place. Water will naturally percolate through soil and emerge clear, you just have to give it a chance to do so.
From the photos it looks like there is more than enough fall from your properties to the street to allow for natural run off to occur, it just needs a little help getting there. If your neighbor isn't willing to deal with or help deal with the problem he has created on his side of the fence, then you'll need to install a drainage system along your side of the fence. A trench with perforated drain tube and gravel should do the trick. If it were me I'd use a trenching machine and go 12" to 36" deep then layer in gravel, perf tube, more gravel, then top with soil. Depending on the depth of the trench, you could install two runs of perf tube. When you get to the sidewalk, just turn the tube vertical and cap it with a drain cap so that water can migrate out as necessary. When water levels subside, whatever is left in the perf tube and gravel will eventually percolate into the surrounding soil.
As for rejuvenating your yard, I am a proponent of sod over seed. I'm in California with great weather and growing conditions, and I've yet to see a seeded yard that was of any value after several months. Sod, on the other hand, is instant green, thick, and lush. The icing is that with sod, you're using the yard within a couple weeks, seed you'll be nursing for months before you can use it, and that's assuming you got a decent germination for all your work and efforts. Yes, sod is a little more expensive to start, however the benefits are excruciatingly cheap in comparison to the time and efforts for a more often than not failed seed attempt. You could go with hydroseed, however for what you're going to spend on hydroseed, you could have bought sod, and hydroseed isn't much different than normal seed when it comes to germination time and maintenance. Given a choice, I will go with sod every time.
I suffer from CDO ... Its like OCD, but in alphabetical order, LIKE IT SHOULD BE!!!