Ever since our dog died we've had lots of issues with neighborhood cats, crapping in our yard and stalking/killing the birds.
Have you asked your nieghbor to keep the cat in? That is where I would start. If that doesn't get you anywhere...
Check your animal control ordinances. In our county, all cats must be licensed. If they aren't licensed, the owners are in violation right there. One is free to trap unlicensed cats in humane traps provided by animal control and turn them in. We've done this. Also, if an animal is roaming that is also in violation of the animal control ordinance. One can request that the owner comply with keeping their cat on their own property. If they don't comply, you can trap a licensed cat also, if they are roaming. The owner then has to ransom the cat to get it home.
Granted, trapping your neighbors cats pisses off the neighbors. Never mind that the cats are roaming and being a nuisance. I have a lot of respect for cat owners that keep them indoors or set up a fenced porch for them. Domestic cats that roam, and feral cats have a huge negative impact on small wildlife and birds. They kill only for sport.
We kept our dogs of the neighbor's lots, why can't they do the same with their pets. Roaming is dangerous for the animal too. I have neighbors that go through a cat a year to due to traffic.
if you want to read more on cats and wildlife,
http://www.owra.org/cateffect.htm