Sounds like this girl who goes to school with your sister is a busy body. How old is she anyway? I've never heard of ordinances limiting number of animals, but have only lived out West.
I agree with CO_Yorkie_Momma, just wait to see if anything happens. It takes a lot to enforce those things, it's not like they will show up one day and say "Hand over the dog miss".
Maybe you could call the town or city hall and just ask what options someone has. Don't give your name though, just ask questions. Do some research.
And, don't validate the neighbor by approaching them. Just lay low.
Feel better, I'm sure it will be fine.