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Contacting various authorities is a great first step in documenting your concerns and maybe they'll even do something about it so you don't have to.

Secondly, I would flat out openly carry the bear spray in my off hand.

Thirdly, the dog being loose in the manner you've described is considered "at large" by many municipalities no matter how good it's obedience is. I'm not sure if there is a state law governing this. You never know when the moment will occur in any dogs head to decide what it wants is more important than obeying their handler.