You definitely need to report this. Have the husband go WITH you to their home and give them an opportunity to satisfy you that they're handling it and that it was an isolated incident.
If the owners are rude or otherwise unapologetic (or if they seem too stupid to understand that this is a big deal that they need to handle), then you need to call several folks.
First, call the police and file a report. Include a photograph of your bite and make sure it's written down that the dog attacked both you AND your dogs.
Second, if the police do not immediately take the dog away from the owners or give you satisfaction that the dog is being handled in some other way, you need to call Animal Control and file a report with them. Same drill as with the cops.
Third, if you still do not receive satisfaction that this is going to be resolved well, call your local Humane Society. Briefly tell them what happened and that no one is listening to you. Then...ask them to advise you about what you can do going forward to get the dog taken out of the neighborhood.
This time...the dog bit a grown woman and a beagle. Next time, he might bite a small child who would fall down and then get mauled.
I don't mean to sound over-reactive, but a shepard could kill a child (or another dog) or leave permanent damage. It SHOULD be the owners' responsibility, but since they're stupid people, the onus falls on you. Don't let fear of some neighbor (especially one who doesn't deserve your respect anyway) getting angry or offended keep you from doing the right thing, imo.
Poor ladies. I hope your leg gets better quickly and I am SO glad that neither of your furbabies was hurt.
