Azure Functions in Visual Studio: Accessing Azure Configured Application Settings Locally

I'm working on an Azure Functions project in Visual Studio and facing an issue with accessing application settings that are configured in Azure. I have set certain configuration values in the Azure portal under my Function App's application settings. However, I'm unable to access these settings in my local development environment.

Local Setup:

Function App with several functions developed in PowerShell.
Using local.settings.json for local development settings.

local.settings.json

Issue:

When I run my function locally and attempt to access environment variables set in local.settings.json, they return empty. I've tried accessing the variables using the $env:VariableName syntax in PowerShell, but it doesn't seem to work.

Write-Host "Storage Account Connection String: $($env:klantacontainer)"
Write-Host "Test Variable: $($env:TestVariable)"

# In my run.ps1 file

$storageAccountConnectionString = $env:klantacontainer
Write-Host "Storage Account Connection String: $storageAccountConnectionString"

$testVariable = $env:TestVariable
Write-Host "Test Variable: $testVariable"

Attempts:

I've ensured local.settings.json is located at the root of the project.
Restarted the Azure Functions host after making changes.
Checked for syntax errors in local.settings.json.
Tried both accessing the variable directly and with the APPSETTING_ prefix.

Application settings

Solution

I am able to get the values from local settings file using the code given below.

run.ps1-

using namespace System.Net

# Input bindings are passed in via param block.
param($Request, $TriggerMetadata)

# Write to the Azure Functions log stream.
Write-Host "PowerShell HTTP trigger function processed a request."

Write-Host "Test Variable: $($env:TestVariable)"

# Interact with query parameters or the body of the request.
$name = $Request.Query.Name
if (-not $name) {
    $name = $Request.Body.Name
}

$body = "This HTTP triggered function executed successfully. Pass a name in the query string or in the request body for a personalized response."

if ($name) {
    $body = "Hello, $name. This HTTP triggered function executed successfully."
}

# Associate values to output bindings by calling 'Push-OutputBinding'.
Push-OutputBinding -Name Response -Value ([HttpResponseContext]@{
    StatusCode = [HttpStatusCode]::OK
    Body = $body
})

local.settings-

{
  "IsEncrypted": false,
  "Values": {
    "AzureWebJobsStorage": "",
    "FUNCTIONS_WORKER_RUNTIME_VERSION": "7.2",
    "FUNCTIONS_WORKER_RUNTIME": "powershell",
    "TestVariable": "TestValue"
  }
}

host.json-

{
  "version": "2.0",
  "logging": {
    "applicationInsights": {
      "samplingSettings": {
        "isEnabled": true,
        "excludedTypes": "Request"
      }
    }
  },
  "extensionBundle": {
    "id": "Microsoft.Azure.Functions.ExtensionBundle",
    "version": "[3.*, 4.0.0)"
  },
  "managedDependency": {
    "enabled": true
  }
}

I am able to get the value of TestVariable as shown below-

enter image description here