The first festival was offered four years ago as a one-off contract and then tendered as a three-year contract, which is now at the end of its term.
Arts and events facilitator Jan Maxwell recommended to the community services committee that it approve the continuation of Summerdaze as it was for another three years, subject to the annual plan.
The festival contract should be advertised and a contractor appointed by the open tender process.
In a separate move, it was recommended that the public be excluded from the contract renewal part of the committee meeting for commercial reasons.
The aim of the family-orientated festival was to provide a series of events for the district's residents over the summer season.
Ms Maxwell said initiatives for next year's festival would tie it in with the Chinese New Year and a celebration of cultural heritage in conjunction with the Lakes District Museum.
She was in discussions with a Queenstown performing arts group which wanted to develop an outdoor event, and she was also keen to include more sports-based activities, Ms Maxwell said.
• A design for the Queenstown Bay playground will be tabled at the community services committee, following positive public comment.
Six submissions were received, all in support.
Residents called for a quick completion of the playground, more refuse bins, rubber surfaces, a preschool-specific bridge and toddler-friendly equipment.
Residents asked that trees which shaded and cooled the site be removed and approved a wet play area.
The council's playground development and renewal report recommended the Queenstown Bay site be upgraded to "destination" status due to its proximity to the shopping centre, lakefront and nearby toilets.
A budget of $500,000 was included in the draft annual plan.
