...so we only have 5 cameras, one at each entrance to our town.

Five cameras is less than what the number of police on duty are using.

The number of cameras matters much less than what those cameras are being used for. If police body cam footage was being indiscriminately scanned for any and all license plate data and all of that data was being fed into a national database which was being routinely accessed and abused that would also be problem. As far as I know, that isn't the case.

Given that in the majority of places police are typically busy doing things like writing speeding tickets and going on calls that leaves a lot less time for them to sit still for an 8 hour shift and record every single plate they can see 24/7/365. Those 5 cameras would represent 15 to 20 officers which is a huge taskforce no matter how large the department.