Does your neighbor know what their dog gets up to?
Why is the dog not confined to their property?
You must have a very obliging postman. In my district a few have had a ring to pick their post up from the local P.O. because they have an unrestained dog on or about their property.
You already know the answer to your question - if the neighbor doesn't fix the situation, the council is the next step.
Dogs rushing up to people is not only disconcerting, but also dangerous. Children on bikes or walking can be terrified on such occasions and are unaware of the dog's intention. Do yourself and the dog a favour and inform your neighbour that it has to stop.