Recommendations for fixing fence acting as a retaining wall

Hello redditors,

I recently moved to this house and have a section of the fence rotted/falling. The house was fully rebuilt in 2018 and the contractor fully replaced the fence except intentionally letting this part of fence be without replacement.

This 80ft section is basically holding a lot of dirt given that our backyard is at higher level than our neighbors. The fence is basically acting like a retaining wall and hence the rotting. I had several landscapers stop by and provide quotes. Here are the proposals from these landscapers -

1) Remove the fence, dig up 5 inches and start building either a concrete block wall or fat face block wall 3ft tall and then build fence behind the wall. This is the more expensive option.

2) Remove the fence, dump boulders all over the boundary and then build fence in front of it. This will lead to us losing 1.5ft of fence line but it's the cheaper option.

What is the best way to do this? The landscapers who are suggesting option 2 think it is a long term solution as well but I am worried if building the fence in front of the boulders would not really help given that the fence would still be holding a lot of the dirt.

Appreciate all the help! I am owning a house with fence for the first time ever.