What the city is saying is that they have or will be installing back flow prevention valves at the meter. That requires you to install a thermal expansion tank.
When water in the heater is heated it expands and increases the pressure in the tank. Since the hot water or output side is sealed (unless you have a valve open) the increased pressure pushes the water back into the cold water side and pressures are equalized. If a back flow prevention valve is installed the pressure in the tank cannot be relieved by pushing water back into the cold water line. Unacceptable pressures can build in the water heater tank and cause the P&T valve to open to relieve the pressure.
Installation of a pressure reducing valve (PRV) can have the same effect. Apparently the city is saying that a PRV is not a requirement unless the pressure is 80 lbs. or greater.
Personally I would not want more then 60 lbs.
You can purchase a pressure gauge that attaches to your hose bib at Home Depot, Lowe's or other hardware stores. About $10-15.