Get a security camera. Watch your kids until the bus picks them up. Call the animal control if you see the dogs loose. Take pictures of the dogs and report any attack. An attack doesn't have to actually involve a bite, only aggressive behavior that elicits fear.
Even if the neighbor WAS an officer, it doesn't make him above the law. In fact, if he is using what power he does have to intimidate others, he's committing abuse of power and there's a special restriction against that.
And firearms being shot off... check for yourself about the regulations. That sounds like BS to me if they say there's no restriction. Most attorneys give free consults so I'd even go there if you can't get resolution with your local authorities.
Good luck.
That certainly is a bad deal. I'm sorry to hear that. : (
I would get statements from all of your neighbors and contact the District Attorneys Office. There is a why to stop that crap. I would also report the police department that said he can do what he wants. A bounty hunter is a civilian and does not have the right to fire a weapon,he is a danger. He dogs are also a danger. I would keep fighting until things change