Do not retain him. It is generally a mistake to do so and there is no research to support retention. None. Thus you would need to conclude this is truly an unusual case or a case of delay rather than disorder/deficit. There is no reason to think his adhd and sensory issues are a delay that will go away. Put in a request for a full case study evaluation to the school in writing today to start planning his iep for first grade. That is bogus about the window having closed and also bogus that they wouldn't give him ot for fine motor and sensory because of lack of academic need but now are retaining him based on that.
In short do not allow the retention. There is no indication to me in what you have shared that there is any reason for retaining except that it is cheaper and easier for the school than providing appropriate early intervention. Key Academic decisions like this about children need to be made based on the child's best interest and needs. Not the schools.
ETA: I suppose I shouldn't say no research but the large weight of the evidence is against retention and some recent studies have found harms with retention as early as the K year. Again, just in case I haven't made my opinion clear
, I think your energy needs to be directed toward coming up with summer therapy and intervention and a solid plan for a first grade IEP with services. Don't engage with the retention more than you need too. Say no you feel very strongly against it, you are not comfortable with it and you want to work collaboratively with the school to come up with a plan for first. If they push further, show them research. If they push further, bring in a special education advocate who should tell them that they have "child find" obligations to identify and service children with disabilities and that they cannot refuse to give services on lack of academic need and then try to hold a child back because the child has deficits in the areas they refused to consider providing services in. Really just dispose of this retention issue, find a *highly regarded* neurospych or testing psychologist with expertise in childhood ADHD and an OT to evaluate his sensory and fine motor so you have all of your private documentation and those experts' suggestion for a plan. Honestly, I think the 504 makes parents and schools feel better because it is "doing something" but in a SIGNIFICANT amount of cases what needs to be done, esp for a young child where intervention has not even been tried, is to provide services not "work-arounds." IMHO.