Water is delivered to the City from 28 active wells in the "Clay Creek Alluvial well field". Two steel ground storage tanks (six million gallons and two million gallons) provide water storage for the City. Six other active wells throughout the City provide water for park, cemetery, and golf course irrigation, for use at the City's maintenance shop, and for use at the airport.

The City's water rights portfolio includes ownership of shares in the Fort Bent Ditch Company (3,199.6 shares), the Lamar Canal Company (350 shares), and the Lower Arkansas Water Management Association (290 shares). Lamar is also entitled to purchase Fryingpan-Arkansas Project water from the Southeastern Colorado Water Conservancy District. The Comprehensive Water Plan completed in 2007 concluded that City's currently owned surface and groundwater rights provide adequate water rights to meet its projected growth.

Water treatment consists of chlorination and fluoridation. The flow is metered at the treatment facility before entering the water storage tanks. A new water treatment facility and a second 24” transmission main were constructed in 2010. In 2013, the department received grant/ loan funds from the CWCB and DOLA to install a new 6.5 mile water transmission line from the south well field to the water treatment facility. The project was completed in December 2014.

The water distribution system is composed of approximately 60 miles of water mains. Two pressure booster stations are utilized to increase pressure to the far south and southwest portions of the city. The system serves approximately 3,000 residential taps and 550 commercial taps with an average daily demand of 1.8 million gallons. The maximum daily demand is five million gallons per day.

The City meets all federal and state drinking water standards.

The wastewater system is composed of approximately 56 miles of collection lines ranging in size from 6" to 24", three lift stations on the east edge of the city and one main pumping station that pumps wastewater to the treatment lagoons. The existing treatment system consists of three lagoons covering an area of approximately 93.9 acres. The first two lagoons are used as naturally aspirated, facultative lagoons. Flow from the second lagoon is discharged into the third cell where it infiltrates into the groundwater below. The wastewater system does not directly discharge to the Arkansas River. The City's current discharge permit requires quarterly sampling and reporting of four ground water wells located upstream and downstream of the lagoons to ensure compliance with water quality standards. There are approximately 3400 wastewater taps in the City. The system treats an average of 850,000 gallons of wastewater per day. Repairs and improvements to the wastewater collection system have reduced groundwater infiltration into the system and have reduced the volume of wastewater treated by approximately 15%. Construction of a new main wastewater lift station began in 2010, with completion expected in April, 2011.

The storm water system is composed of a system of collection lines throughout the City that transport storm water flows to Willow Creek, the greenbelt, and the Lamar Canal. Three storm water pump stations are utilized within the system.