Entity framework memory not released

You would then need to implement IDisposable in the internally controlled class that descended from DbContext in your situation, then inside the LocalContext, add the following:

public void Dispose()
{
    this.Dispose(true);
    GC.SuppressFinalize(this);
}

protected virtual void Dispose(bool disposing)
{
     if (disposing)
     {
        // Manage any native resources.
     }
   //Handle any other cleanup.
}

The using statement will just call Dispose() against the base class, whereas you need to dispose of the parent and base, unless you specifically override it.