In June 2009 and August 2009 respectively, the Commonwealth, in partnership with the NSW Government, commenced the operation of Regional Development Australia (RDA) Committees with the appointment of Chairpersons and members. Minister Crean confirmed broad roles for the Committees, including preparation of Regional Plans and significant involvement in the RDA Fund (RDAF) process. Commonwealth funding of vital hard infrastructure under RDAF has been well received by the local government sector. However, councils have been required to propose projects which, in Round One, were to align with RDA Regional Plans and demonstrate regional significance. Round Two funding required local government proponents to lodge Expressions of Interest (EOI's) for assessment by RDA Committees, which were required by the Commonwealth to select a maximum of three EOIs to go forward for more detailed consideration. These and other matters relating to RDAF have caused tensions between RDAs and local government. The paper discusses those tensions and suggests options to overcome the concerns of local government.