I think you very well might have a water leak there, but the odds are it's on the city side of the meter (or the meter itself which is also generally the city's job to maintain). Have your water bills been totally nuts?
I would say a call to public works is in order. They will at least want to fix the sidewalk which is an obvious trip hazard/ADA problem.
Bottom line, no need to panic. It's almost certainly not going to be your responsibility to fix assuming there's a problem.
-W