So far in 2014 a total of three companies—National Instruments, Dropbox and US Farathane—have canceled their economic development agreements with the city of Austin. Collectively the companies would have brought about 1,400 new jobs to the city.

The companies cited various reasons for dropping out, from difficulties in complying with their incentive agreements to changes in the global economy. Dave Porter, senior vice president of economic development at the Greater Austin Chamber of Commerce, said that although companies canceling agreements is infrequent, it still happens.

"The process for complying is very onerous and expensive," he said. " Once you [get an agreement approved by council], you don't realize the cost of trying to comply with the contract with the city."

Porter has not spoken to all of the companies but said National Instruments' decision to drop out was because of the global economy in its industry and not as a result of more restrictions in Austin's incentives program.

If more companies continue to drop out because of the cost of compliance—as was Dropbox's reasoning—Porter said the city's program might need to be tweaked.

Of 21 incentive agreements approved by Austin City Council since 2003 when the city implemented its Chapter 380 Economic Development Program, only 10 are still active. These include nine agreements with companies and one development-based deal for The Domain. Another deal with TV show "Friday Night Lights" has been completed.

That leaves 10 agreements that have been canceled with the city. In a June 10 statement, Mayor Lee Leffingwell said the news of the latest three companies dropping out is disappointing because the jobs that would have been created out of the agreements would have paid an average wage of $72,000 annually.

"It concerns me that we have greatly diminished the effectiveness of our incentive program by placing burdensome conditions into the agreements," he said. "These obligations range from exceedingly difficult reporting requirements to new provisions regarding prevailing wage and minimum living wage, and other requirements."

The city has paid $43.7 million toward these deals as of press time July 18. That figure includes $613,335 paid to companies that dropped out of the program. A company that received incentive payments does not have to reimburse the city if it drops out of the program, said Rodney Gonzales, deputy director of the city's Economic Development Department.

Incentive payments are performance-based, meaning a company must first demonstrate it has complied with the terms before being paid. City employees review all terms with a company to ensure the company is aware of them before council approves any deal, Gonzales said.

The bulk of incentive payments has gone toward Samsung—$33 million to date—on a $62.9 million agreement to hire 500 new employees and invest a total of $4 billion, according to city documents. The city is reimbursing 100 percent of Samsung's property taxes for the first 10 years and 75 percent for the last 11–20 years of the deal.

Before payments are issued, the city uses a third-party company to verify a company is compliant with the terms to which it agreed.