If you put up an electric fence, besides warning surrounding neighbors, get those little yellow/black fence warning signs...Then if anyone does complain, you can say you told everyone, and there are signs...Not much they can do about it then.
And the concept of touching it once and not touching it again will go for kids too I bet
(meaning your own kids if they dont listen about not touching it) Just get one of the lower voltage chargers - I use a solar one that is meant for 10 acres. It was only covering about 5 and it gave a good zap, but not enough to leave a mark or really hurt, but it worked great to scare the animals...Just a thought.
I would definitely NOT buy them a kennel...Chances are, they would just say screw you, we dont need your help, and let them out on purpose.
Sounds aweful, but the way I look at it (we live on a good sized highway where everyone always goes 20-30 over the speedlimit) - maybe if their animal doesnt come home one day, they will get the hint! Same goes for kids...our neighbors are aweful about letting their animals loose, but their kids play in the middle of our highway...on a bad corner, where who knows how many accidents have happened, and animals have been killed.
Anyway, let us know what you end up doing! You need to get it fixed now before it REALLY turns into a problem!