Some people are such bad dog owners. I had a problem with a neighbor's dog a few years ago, tried being a good neighbor and talked to him about it instead of calling Animal Control. He told me the same thing that your neighbor did, just yell at the dog or hit it, shoot it with a BB gun. What my neighbor made clear is that he was not going to do a thing to control his dog. He even told me that things were much better before i bought my house, because the previous owner didn't care about the dog running loose.
My dog IS dog aggressive and there were constant, daily fights with this darn dog for months. My neighbor didn't care. The other dog was old and I guess he died, because one day he just stopped showing up. I didn't have it in me to do SSS, but i probably should have called Animal Control, because things deteriorated with this neighbor to the point where we weren't speaking anyway. He has since moved away.
Unless you can put up a strong enough fence to keep that husky out, I'd call Animal Control or do SSS. It's not worth losing your livestock. Sounds like you've got a good dog with your shepherd.