BS.
As you can see from that link this paper is alive and well.
I have no idea how could city authorities order to “close” a newspaper.
They just don’t have the power to do that, even in Russia.
These must be a court decision and Russian courts are under control from EU court.
I think one liberal from a city counsil told he don’t like a paper and other liberals reported city ordered to close it.
Browse this paper archives and you’ll find it worked well through 2006 as well.
Volgograd journalists resist closing paper after cartoon scandal - February 17, 2006 - Journalists in Volgograd, a major city in southern Russia, protested Friday against closing a local newspaper embroiled in a controversy over the publication of a religious cartoon. "The decision of the Volgograd administration to close down the Gorodskiye Vesti newspaper for publishing a religious illustration casts doubts on the main principle of a democratic state - freedom of speech," journalists said in an open letter.Volgograd Deputy Mayor Andrei Doronin said the City Hall, as the founder of the newspaper, would close down Gorodskye Vesti. "We have carefully studied the article and decided to close down the newspaper in order not to inflame ethnic hostilities," he said.
Gorodskiye Izvestia Editor Tatyana Kaminskaya apologized for any offense that may have been caused, but added that she had received no complaints from religious or ethnic communities.
Russian editor fined over prophet cartoons - April 14, 2006 - The Vologda city court found weekly Nash Region editor Anna Smirnova guilty of deliberately stirring up religious hatred and intolerance, as well as abuse of her position. She was ordered to pay 100,000 rubles (€2,978) in fines. Smirnova’s husband, who owned the now-defunct weekly, called the ruling “absurd” and said she would appeal. President Vladimir Putin has condemned any publication of the cartoons, apparently out of concern that it could destabilise Russia, which has about 20 million Muslim residents – nearly 14% of the population.
The newspaper you linked probably just took over the generic name "City News" after the previous paper was closed. Those who say that Russia is now more free than the USA are wrong. Dead wrong. To even draw a picture of mohammed is a hate crime in Russia and KGB Putin will not put up with blaspheming the name of "the prophet."