Council is hiring an expert to develop a five-year strategy for Winter Magic.
A request for quote has called for a "suitably qualified and experienced event management professional to develop a high quality five-year event strategy, including managements plans" for the festival.
The objective is to provide a clear blueprint for ensuring a safe, successful and sustainable festival into the future.
Council will also look at how such a strategy, once completed, might be utilised for other events in the Mountains.
A council spokeswoman said the request for quote was "phase two of the council's $80,000 financial contribution from its 2018/19 tourism budget and follows a review of the festival completed in October 2018".
"Council recognises the value of the Winter Magic Festival to the community and the cultural calendar of the Blue Mountains. We remain committed to the Winter Magic Festival being community-led and a sustainable event."
The request for quote closes on April 30.
Katoomba's popular Winter Magic festival was cancelled last year amidst issues around traffic management, resourcing levels and the need for a re-think of the whole event.
This year's festival will be held on June 22, but without the parade.
Instead, organisers are concentrating on presenting a community art and performance day.
Committee president, Naomi Parry, said some important investments had been made this year.
"We are supporting 14 local community organisations to present new work - these include Hands, Heart & Feet, Blue Mountains Flamenco, Wagana Dancers, Gateway Family Services, Katoomba High and Blue Mountains Steiner School, and Fibres in the Mist.
"We are also scheduling a full day of performance and street theatre up and down Katoomba Street, in Civic Place and in the Cultural Centre, and it's all going to be provided by talented locals."
Despite the pared-back festival, there is still a need for sponsorship, Ms Parry said.
"This is a free event, but it costs tens of thousands of dollars for traffic management and insurance, let alone for the all-important arts program.
"It is vital that community members and businesses that want the festival to thrive support it, and the best way to do that is to offer cash.
"We're thrilled to have the support of big tourism operators, like Scenic World, The Carrington, Fairmont, and Escarpment Group, but we really feel smaller operators, businesses, real estate agents and AirBNB hosts have to pitch in too."
Anyone interested should email email@example.com.
Ms Parry also invited friends of the festival, community members, volunteers and sponsors (both current and prospective) to the launch party of this year's festival - the theme is Under the Winter Night Sky - at the Baroque Room on Thursday, May 2, from 6-8pm. Please RSVP to firstname.lastname@example.org.