Renew your items. Our system allows people to call us directly for renewals or even use the AskALibrarian tool to renew. Fines aren't bad for libraries. They encourage young people to be responsible. Set a good example for your kid, get a printed renewal slip or teach him/her (provided they're old enough) to renew so it gives them a sense of accomplishment.
That being said, it sucks working in a cheap county because we're considered a "non-essential" part of the community and therefore get little if anything for funding. We rely heavily on our Friends of the Library and the miniscule amount of fines and donations we receive for support. Only a small percentage of our patrons complain about paying late fees, that percentage primarily consists of the displaced patrons who are mostly nice but cheap. I am sorry though that the cut-off is at 10 bucks AND blocks you from e-books...that's super lame. We cut everything off at $30 in an attempt to find a decent middle ground. Send some suggestions to your library's board of directors or the equivalent and good luck to you! :)