mid-size and larger cities don't usually carry insurance. Insurance only makes sense if the potential exposure would ruin you financially. Since richmond's budget is around 800 million dollars, there's not a lot of perils that could cause that much damage.

Buildings don't burn down that often. Fox has been there for 111 years. And unlike you and I, the city has hundreds of buildings. If the city were paying premiums on it (and every other building they own) they'd be paying millions of dollars every year. After just a few years, they'd have paid in premiums what it costs to just rebuild the building.

What they should do is be self insured, ie they pay those premiums to themselves and invest the principle, but then after a while people start looking at that big pile of money and going "you know, buildings don't burn down that often, and we really could use it for x".

So they spend it.