Nowadays, the globally accepted UN concept of sustainable development (SD) is gradually transferred to the city level, including small and medium-sized cities. The implementation of SD settings requires regular measurement of developmental progress to monitor the level achieved in statics and dynamics, and to make strategic decisions for the next period. The existing urban SD indicator systems and indices are not well-suited for the monitoring of specific cities. Benchmarking algorithms and mathematical modelling procedures were applied to create a methodology and mathematical model for measuring the achieved urban SD level and to ensure the most objective selection and proportions of key performance indicators (KPIs) to be included in the model. The model (1) complies with the UN concept, (2) is usable for any EU city, (3) reflects the level of quality of life achieved, and (4) includes a limited number of KPIs related to municipal functionality. Mathematical computation of the (1) causality between the KPIs, (2) selection and proportions of KPIs, and (3) the general level of urban SD, as well as the reasonable combination of universality, accuracy, stability, and simplicity are strong advantages of the model. Using the published mathematical expressions of the model, calculation of the SD level does not require specific skills; the performed stability test also confirms that annual calibration of the model is not necessary. The index will help municipalities in planning and managing SD, and in the rational use of their usually limited resources. As a pilot project, SD level values are calculated for several cities.