I know im late to the party here, But when we first got our chickens 4 months ago we where having coyote problem in out neighborhood they had taken our neighbors chickens and they had jumped over another persons fence down the street and took there little dog. I live in a very open area. everyone around us has 5 acres or more and we are backed up to hills on 2 dif sides. We had to up to the run and where pacing back and forth. we have 2 outside dogs and they where barking there heads off and that did not scare them away. My father used to hunt and shot one in the hip with his rifle and the other took off down the dirt road. We do not have a fully fenced yard, we only have a small dog area where they dogs are fenced in, and we put them up at night. The guy a crossed the street had caught one a few nights later. You asked what you should do when you kill it. If its later in the day i would hang it for the rest to see and then burry it the next day. since then we have not had a coyote step foot in our yard. As for the baiting the dogs. They are known out here to one go and start playing with a dog and running around with it and taking them into the hills or heavily chaparral areas and the rest of the pack jumps them. I know this is upsetting but we hear this happen to dogs maybe once a month out here. I am sorry for the long story. Hope you get your problem solved before they can steal any of your chickens.