I think you made the right call, you put your neighbor on notice. I really hate it when small dogs get a pass because if their size. If it was a bigger dog charging at people it would not be tolerated. I would maybe try lemon juice first if you have to spray the chi, in case there would be any chance of blow back on Beau, or what about an airhorn?
Bear GSD 10/16/11
Elsa GSD 12/23/03 - 11/10/11