While I think it's bullshit that the city seems to be continually ignoring these citizens concerns, this guy just taking it upon himself to install stop signs and other traffic signals is not ok.
If he wants action he needs more than just a handful of his neighbors' signatures. The city is a political entity, you want action you need to go for the political jugular. Admittedly, a story in a large newspaper or online publication like this is one way to get that sort of attention, but an arrest is not going to help your case. In this age where video surveillance is easy to set up I would have set up a camera at the location and documented every single near miss and if the city ignored that I would have taken it to YouTube and a local news station with a super cut of near misses at that location.
There are multiple ways of going about things like this, flouting the law is not the best.