City officials and regional transit leaders briefed the Redmond City Council on June 10 about delays in federal transit reimbursements and short cash reserves at the Oregon Department of Transportation that could create a service gap on July 1.

James Wood, finance director for the city of Redmond, told council staff had temporarily paused awarding a transit services agreement to COIC while the state and federal funding timeline remains uncertain and while contingency language is negotiated. He said the pause stems from a federal funding delay that affects the flow of 5310/5307‑type funds (staff described them as federal funds administered through ODOT for specialized and regional services).

Bob Townes, director of Cascades East Transit (CET), told the council CET and COIC have historically operated with an understanding that federal funds were eventually reimbursed through ODOT and that ODOT previously fronted shortfalls from reserves. “ODOT … they had reserves and then the feds would pay when they did,” Townes said, and added that ODOT now lacks extra cash reserves and reimbursement delays can be several months. Townes said CET has “100% confidence” it will be reimbursed and that the Federal Transit Administration had advised agencies they could proceed spending as of July 1, but that reimbursement timing remains uncertain.

To avoid service interruptions, Townes said CET/COIC offered to front two quarters of funding for Central Oregon’s regional dial‑a‑ride services (including Redmond) while staff seek written confirmation of future reimbursement. Townes said CET is willing to assume the near‑term cash‑flow risk if the City of Redmond will run the regional contract (a model used previously where the “city runs the contract for everybody”). He told council CET would include contractual language intended to protect the city and asked the council to consider awarding the contract while language is finalized.

Councilors asked about local matching funds and the risk if reimbursement ultimately fails. James Wood said cities contribute a budgeted match and that Redmond has budgeted the match in the FY26 budget. Townes said CET could likely front a year’s worth of funds if needed but stressed that prolonged federal delays are already straining smaller agencies without reserves.

Outcome: council did not take a formal vote to award the contract the night of June 10; staff paused the award while working with COIC/CET and negotiating contract language to protect the city and ensure continuity of service.