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DO contact the school. They can't do anything if they are not aware. They will appreciate knowing about this guy's behavior. Being crude is one thing and using racial slurs is quite different. This guy needs to correct his behavior ASAP or not be around kids.
I'd call the principal and also send a letter to verify that you contacted him. "This letter is a follow-up to our conversation of ..... so that you have a record of what happened with that coach." The letter is just in case the principal is of the old school where you ignore such incidents. That way you are covered and can show (keep a copy of the letter) that you reported the incident. The principal should be aware that this is a serious situation and that he is required to deal with it.
As a former principal, I know that I would have appreciated knowing what took place.
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