You could call AC and just ask them advice on how to handle the situation. This way they know but you didn't turn them in (yet).
If the owners are approachable you could tell them that you are worried about their dog and ask them how they can help the kids stay safe and see their response. If that is not good, it's back to AC.
Deja, GSD, sable WL, female, born 11 / 2013
Cam, Rough Collie, sable, male, born 8/2015