Callery told the Friends of Covington civic group at its annual Christmas party this week that the jobs will come from out of the area, not Northern Kentucky.

"We're in good shape," he said. "We're going to get even better in 2004," he said

IRS spokeswoman Pat Brummer said she couldn't confirm the announcement.

"The issue is being talked about, but no definite decision has been made," she said.

Brummer said she did not know if the jobs were new or were being relocated from another site. She also didn't know if the jobs were seasonal or permanent, entry level or higher up.

"I don't care if they are entry level or not, that's a lot of new employees for a city of 44,000," Callery said.

Callery said the operators of the Gateway Center West, Wessels Construction & Development Corp. of Fort Wright, not IRS officials, told him about the new jobs.

Wessels representatives could not be reached for comment.

IRS employs about 3,500 seasonal and permanent employees at the Gateway center and its sprawling Fourth Street building. About 300 IRS employees work at a Florence location after their jobs were moved there.

The IRS is the largest non-manufacturing employer in Northern Kentucky and is Covington's largest employer.

Callery, in a "state of the city address" also touted several other city accomplishments from this year, including retaining its $1 million rainy day fund.

Callery said the city has not raised taxes or cut services in what has been a difficult economic year for many cities.

The city experienced some residential and commercial growth, Callery said.

Ten new companies located in the city's enterprise zone, investing $4.8 million. Fifty new homes were built in the city -- an investment of about $13 million.

Callery said the city helped 75 people become homeowners, bringing about $5 million into Covington coffers.

The city has begun offering $6,000 loans to teachers who work for Covington Independent and Covington Catholic schools to buy homes. Teachers will have to stay in the city for six years, and after 15 years, the city will forgive the loan completely.

The city plans to implement a similar program for Covington police officers, Callery said.

Chuck Eilerman, president of the 250-member Friends of Covington civic group, said he's excited that Covington has been experiencing so many positives after being one of the country's most distressed cities a few years ago.

"We've come light years," he said. "We and Newport are the envy of Cincinnati in many ways."