Hmmmm . . . well, I agree with laws that restrict keeping wild animals in a populated area -- who wants their next door neighbor keeping a "pet" lion in a backyard enclosure or a elephant down wind or a chimp who might rip off someone's face? (Not to mention that I think that it's usually cruel to the animal involved. IMO all the wild animal species who take to domestication have already been domesticated.) And I've read that Ms. Carr rents, so she could solve this by making arrangements to move a little further out into the country.
On the other hand, I don't see any reason that the Broken Arrow city council can't just make a temporary exception, considering the animal's disability and its therapy role, and wait to see if he does begin to grow large or become aggressive. He seems to be bonded to Ms. Carr and she's rehabilitating him. (Wish she'd quit dressing him in children's clothes, though.)