LYNN – Still unaware of what is coming in the way of state funding and fearful of what the economic future holds, the School Department finance team is beginning to craft a bare-bones budget for fiscal year 2010 this month, hoping for the best but preparing for the worst.Superintendent Catherine Latham told the School Committee Thursday night that she has been working with Business Administrator Kevin McHugh to build the budget from the bottom up, pushing class sizes to the maximum and keeping staffing and supply levels at a minimum.”I can tell you that we are building our organization and we know that things are going to be bad. We are building the schools from the bottom up,” said Latham. “We know we dodged a bullet (in 2009) with the help of the unions (who agreed to work a day without pay to avoid layoffs), but we also know that the bullet has just slowed down – it is still coming.”Unlike previous years when the administration met with principals to determine what they needed for the schools when making the budget, McHugh said this year he and Latham would instead determine what they could afford to do at each school while keeping class levels at a maximum number.In addition, a department wide hiring freeze will continuein 2010, and the possibility of layoffs is still strong depending on funding from the state and federal level.”Layoffs will probably have to happen for next year,” said Latham. “I can’t tell you who or how many or when they will go out yet, but they are likely.”McHugh is essentially basing the 2010 budget on the 2009 numbers until he finds out exactly how much local aid will be coming to Lynn next year. Gov. Deval Patrick has promised that Chapter 70 education money would not be cut, but has not indicated that he would increase that number either.”We don’t know what the definite number will be, but we know it is not going to be the same as this year,” he said. “We are looking at the class size and enrollment right now and we are building from the bottom up. Class sizes will go up in the elementary schools, cluster sizes will grow in the middle schools and we are looking to make some adjustments to fine tune the workforce and also looking at some other initiatives in the high schools as well.”One ray of hope in the eyes of many has been federal stimulus money that is supposedly earmarked specifically for the city of Lynn, but as unions and legislators continue to tout President Barack Obama’s additional funding as the saving grace, Latham says relying on such funding is dangerous.When asked about stimulus funds, the superintendent warned that any money that is earmarked for the city would likely be subject to state oversight, essentially forcing the department to write grants and explain what they are going to do with the cash before the state releases it.This would make it difficult to anticipate how that funding could fit in to the budget, and impossible to predict when the state would release the money once the grant is submitted.”The stimulus money could have many, many strings attached,” Latham said. “We could have to write grants at the state level to get the funding, probably in the way of entitlement grants. I don’t know for sure, it is just a guess, but I think the state is going to want to control how this money is spent so we will probably have to apply for it through entitlement grants.”Latham and McHugh also warned that any stimulus numbers being bantered about on the Internet or in various state and city departments are likely inaccurate.Mayor Edward J. Clancy Jr., who is School Committee chair, declined to comment on the budget, noting that it was apparent from his 6-1 defeat in the vote to approve an unpaid day for school department workers Feb. 18 that, “No one wants to hear what I have to say.”Latham said she could not give a time line on when the budget would be completed, but noted that it would have to be finished at least a month before the end of the fiscal year, as she must send out l