Los Angeles officials agreed Friday with former Mayor Richard Riordan that the city needs to reform its pension system, but disputed his contention that bankruptcy should be part of the process.

"Declaring bankruptcy, ultimately, has an impact on the quality of life of Angelenos and the brand of the city," City Administrative Officer Miguel Santana told the City Council.

"It becomes a question of whether the city becomes a place where companies would want to invest or plan for their growth. It turns over decisions to a third party on which programs are needed and should continue and which ones should be stopped."

And, beyond that, Santana said the city would face a loss of revenue through higher costs of borrowing money.

"There is no guarantee that pensions would change or that union contracts would be torn up," Santana said. "The question we have to answer is do we have enough money to get by for the next year?"

Santana's report was in response to Riordan's assertions, made over the past month and in the Wednesday edition of the Wall Street Journal, that pension costs will bankrupt the city and it would be better to prepare for it now.

Pension costs do remain a constant requirement, Santana said, but the annual costs are about $800 million and not the $1.2 billion projected by Riordan.

"We do agree it is a critical part of our budget and we are working to reform it," Santana said.

While disputing many of Riordan's projections, Santana said the city has taken a number of steps to deal with higher costs, including a 5,000 employee reduction in the work force while exploring pension and health cost changes.

The city is limited by state law in altering pensions for existing workers, but is negotiating changes for workers hired in the future.

Also, Santana noted that under Riordan an increase in pensions for sworn workers was approved that allowed workers to retire at age 50 with higher benefits.

Riordan said the city needs to look toward the future and deal with the problems. He also questioned the numbers given on how many workers have left city employment.

"They play games with the numbers by moving people around," Riordan said in an interview earlier this week. "The most recent snapshot I've seen is they they have more workers on the payroll."

Councilman Ed Reyes said he did not believe the discussion was helpful. "I look at Joe Citizen, the constituency we serve on a day-to-day basis, and this is not helping them," Reyes said.

Councilman Tom LaBonge, who worked for Riordan briefly when he was mayor, said he appreciated Riordan's advice, but officials have to recognize how different the economy was during the earlier administration.

"He did what he thought was in the best interest of the city," LaBonge said. "Times have changed and we need to take a different approach."