In the past week alone, Wollongong City Council has been told its latest application for Resources for Regions funding failed because: the scheme was not for funding tourism ventures, the scheme was for improving publicly-owned assets, the council had only put in one application and the application was not well presented.

The program gives funding to compensate for the impact of mining on communities.

To date, $217 million has been allocated to the Resources for Regions fund.

Wollongong had asked for $3.5 million for the installation of utilities at Mt Keira and preparation of a masterplan for an "adventure park" at the site.

Wollongong's previous application, for funds to upgrade the WIN Entertainment Centre into a fully-fledged convention centre, had also failed to make the shortlist.

The city received $4.5 million for the upgrade of Cordeaux Road and its bridge in the first round but there has been no joy since then.

Lord Mayor Gordon Bradbery has asked council general manager David Farmer to urgently review the Mt Keira application to check if it was up to scratch.

Trying to pin down the reason for refusal has been difficult.

The Government's reasons have been varied, creating some confusion as to just what the Resources for Regions program is for.

As acrimony mounted during the week, Member for Kiama, Gareth Ward, blamed the "incompetence" of the council, and said he had been told "the quality of the application" was the reason it was knocked back.

Minister for the Illawarra John Ajaka gave other reasons, appearing to say it counted against the council that it had only put forward one project but also that the council should review the application before complaining, and that the program was not for tourism.

"Resources for Regions funding is for projects that will provide infrastructure to accommodate population growth in mining affected communities - and not for tourism purposes like the Mt Keira summit park project," Mr Ajaka said on Wednesday.

"I am also perplexed as to why Wollongong council submitted a similar application twice given that it was rejected in the previous round. We're going to meet with council to advise on selection criteria and identify the reasons why the project missed out twice."

Mr Ajaka's comments about tourism were surprising, given the Resources for Regions criteria specifically mention "recreational facilities" among the "social infrastructure" that could be funded.

Deputy Premier Andrew Stoner played a straighter bat, referring to the criteria for funding, and saying because the money comes from the sale of public assets, funding should focus on the improvement of public assets.

His spokesman said the fund is to support communities "by addressing infrastructure constraints".

"As funding for Resources for Regions comes from the sale of publicly owned assets, the focus is on projects that involve the creation or enhancement of publicly owned assets, like hospitals."

But his office on Thursday dismissed Mt Keira as "a local park".

"Only one expression of interest was received within the Wollongong LGA in the 2014-15 round for funding, to assist construction of infrastructure for the redevelopment of a local park," Mr Stoner's spokesman said.

Wollongong City Council argues Mt Keira is a public asset.

Mr Farmer said the application was not just for a tourist development, but for power and water infrastructure for Mt Keira as well.

"Council's application addressed issues relating to the criteria and stressed that the major cost was to re-establish a power supply on the site," he said.

"This supply had been lost due to the closure of mining activity. The power supply currently supports communications for a range of emergency services and is now provided by generator power.

"Agencies such as NSW Police, Wollongong Hospital, SES, and the NSW RFS use this tower, which has been identified by the Local Emergency Management Committee as critical infrastructure ..."

As for the quality of the application, Mr Farmer said it was properly targeted.

Council areas, listed by mining-affectedness as determined by NSW Govt. With total funding delivered under Resources for Regions since 2012:

* For this calculation, funding for projects shared between neighbouring LGAs has been split between the two areas.

^ Not admitted to the program until 2014.

Sources: Economic Assessment of Mining Affected Communities 2013, Deputy Premier Stoner statements.