I've handled a claim where the city shut down the water due to them detecting a leak through the standard meter before. Granted this was during winter when the water bill was 4 times higher than usual. Someone from the city came knocking and when no one answered and the house appeared abandoned they shut the water off at the street. You can imagine how pleased the landlord was to arrive back in the country after a month and walk into that mess.

Long story short, the city CAN discover a leak and turn your water off for you, but probably after about a month too late, and only if it's winter, and you'll still have a huge water bill.