How would you handle the situation of the man next door exposing himself to his neighbors?

The man in question is now deceased. For years, we suspected he was exposing himself to the neighborhood children. One sunny, summer day, my daughter was catching a few rays in the backyard. The man next door came out his back porch, wearing a mans housecoat with a tear in the front and exposing himself. I started to arrest him, but my wife said she would handle this situation. She grabbed the video recorder, went to the other side of our house, and video-taped my neighbor in action. The tapes turned out great. Some of the neighborhood women got together and confronted this man. He watched the video tape and begged the women not to tell his wife, children and the people at his church. The final agreement was that he would seek couseling and bring the reports back for the women to inspect. This he did. Soon after, they moved.Question: Could this situation have been handled another way? Was this the correct procedure, considering he was our neighbor and no one wanted him arrested? Whats your opinion?