You need to fix your fence. Keep your dog confined to your yard. Keep him on leash when walking him in the neighborhood. Only let him loose in places where he can't hurt another small animals.

This is not your dog's fault. He acted on instinct. He's not a bad dog. You have to prevent him from getting the opportunity again.Prey drive and aggression are completely separate issues. There is no reason to think that your dog would harm a child because of this incident--although no dog should ever be left unsupervised with a small child.

My own dogs recently killed one of my cats when she got out of the house. All my cats are indoor only creatures. The dogs are just fine with them inside. They have lived peacefully together with no incidents for over five years. Outdoor cats are prey though to them, just like squirrels, mice and voles. Unfortunately, Dominique paid for my inattention with her life. I did not see her sneak outside- My fault, not the dogs'. Finding her body was the single worst moment of my life. I will never forget it. I miss her forever.

You know your dog can get out of the fence, so fix it. If you don't, this will happen again and it's your fault, not the dog's. You should also be aware that in some places a dog that kills another domestic animal off the owner's property can be declared dangerous and be euthanized. If you don't stop him from getting out, his life could be at risk--from any number of things, including Animal Control!

You might also want to offer to pay for a new cat when your neighbors are ready to adopt again.

And your neighbors need to keep their cats indoors. An outdoor cat is at risk from alot more things than just dogs!