Update:
First I want to thank everyone who replied here. I know I can count on the combined wisdom, experience, and opinions from like-minded folks on the Fire. And I appreciate being able to use this forum as a sounding board.
I believe I have the situation under control now.
The school principal has completed her "official investigation" and issued a "stay away warning" to the parent and child.
I am taking copies of all her documentation, with my written records to talk with an Attorney tomorrow afternoon.
I filed a report with our City police.
I reported suspected mental health concerns and abuse to family protective services through the child abuse hotline.
I have given my neighbors the description and license number of the womans vehicle. I told them she had threatened my child and to please tell me if they see that vehicle in our neighborhood.
I have alerted my home owners association of a threat to my family and discussed getting the video recordings of our community access gate recorder in the event of an incident.
I have heard through the "grapevine" that my discussion with the woman on Monday evening was more effective than I had even hoped for. Different adults have told me that the woman is very embarrassed that this incident is in public. I have been told she feels "embarrassed and intimidated". At this point she isn't aware that I have filled complaints with the police or family protective services and the Attorney has not been involved yet.
I have explained to my son that because they have a documented history of bulling him and a "stay away warning" at school he can assume that if he is approached by that boy, the boy intends to do him harm. My son understands that he has no restraints from me to protect himself by taking the kid out and that he is in a very defensible position when he has to do so.
I have discussed with my son actions he is to take to protect himself if he sees that woman approaching him.
I have tried to teach my son through this event that even though we have to work through "the system" when push comes to shove we have to be prepared to defend our selves. I've explained that the "authorities" can't protect us. All they can do is investigate and punish after the assault has been committed.
I teach my boys martial art self-defense. My son knows that his mother, older brother, and I have carry permits and carry concealed handguns. Self-defense training and awareness is just part of life to him.
I don't feel that my son is as worried about the situation now. He knows what to do to protect himself and he knows his mother and I are going to stand up for him and protect him from "getting in trouble" at school when he does.
