LYNN – The Tracy School will remain open and Mayor Judith Flanagan Kennedy’s centralized school administration plan is up for consideration as the School Committee launches its budget review tonight.A former committee member, Kennedy is crafting her first city budget as mayor and one of her priorities is finding ways to absorb a $3 million to $4 million potential cut in state aid to schools without cutting teachers or closing schools.Lynn’s state legislative delegation told Kennedy and Superintendent Catherine Latham this week that the $118 million in state aid directed to local public schools could be cut by 3-5 percent.”I will be making cuts,” Kennedy said last week, adding non-salary items on the school and city side of the budget will be axed first.The 112-year-old Tracy School needs at least $2 million in repairs to its leaky roof and faulty boilers but school officials plan to keep Tracy open by making priority repairs and, if necessary, positioning mobile boiler units on school grounds.Kennedy thinks the school system can save money by moving administrative offices from Broad and Commercial streets and other locations to one site. She suggested the now-closed Ford School annex on Bennett Street as a potential site.”Centralization makes sense from an efficiency standpoint,” said school spokesman Thomas Iarrobino.Closing the annex last year saved the School Department $1.3 million, but Ford parents criticized the decision and Kennedy has said she favors re-opening the annex. She suggested school officials look for unused or underused space to house the annex if the Bennett Street building becomes a centralized administration building.Iarrobino said moving administrators out the department’s 90 Commercial St. headquarters could free up space for eighth grade classes and nighttime programs for adults.The School Department closed an eighth grade program for middle school students interested in attending Lynn Vocational Technical Institute in 2007. Latham would like to see the program reinstated but said the department probably cannot afford to do so until next year.”It was a wonderful program that gave children a chance to see if they like Tech,” she said.The eighth grade program dovetails with Latham’s goal of introducing pre-engineering technology training to Tech in order to help students gain skills for 21st century jobs.”We need to ramp up the study of mathematics and stem research,” she said.Kennedy, like mayors before her, has other major expenses to consider as she crafts a budget. Health insurance, traditionally a budget buster, currently totals $35 million for city workers and retirees including $25 million dedicated to school workers. A claim influx between now and July could drive up insurance costs.Union contracts on the city and school side are a significant expense. Kennedy in February said she “is not optimistic” about city union negotiations producing raises for employees. She said city and union negotiators will have “to be creative” and consider “non-salary concerns” in crafting contracts with teachers, public safety and City Hall unions.School spending for the budget year that starts July 1 is already proving to be a challenge for Kennedy with the Harrington and Connery Schools starting a review process aimed at reversing poor state comprehensive test scores. The School Committee, starting tonight, will begin reviewing options for improving test performance in both schools.