In terms of sustainability, cities become smart when they provide intelligent services to the inhabitants using information and communication technologies without threatening the future of the environment, economy or the society. However, the process of developing such sustainable smart services has certain challenges, especially in understanding the real needs of the people living in the city. Inhabitants of the city or the citizens are the key stakeholders in case of smart services in a city. Active involvement of the people throughout the process is a way to design such services. On the other hand, integrating sustainability, for example including environmental data to the smart city services has been found challenging. Therefore, this research discusses an approach on combining environmental data with regular smart city services and to engage city inhabitants in the process, the approach that is adapted from the concept of living lab methodology. Finally, an application has been developed to represent a smart city service following this method.