You say, "I don't think that government has any place regulating which information can be released to whom." The police work for the city. The librarians work for the city. They are fellow employees. They are perfectly capable of working together as employees of the same entity to maintain privacy and confidentiality. This thing where librarians, who maintain city records, will not release those city records to the police of the same city is a total made up excuse, made up by the American Library Association.
Then let a legitimate police officer show up at the library.
What is wrong with that?
The policies of the ALA might seem a bit hard core, but they're in place to keep private records private. In this day and age that's a laudable goal, and one that I support.