Utah State University Extension
Mulch can provide many benefits in water-wise landscapes. Mulch covers the soil and prevents crusting, compaction, and water evaporation. In fact, mulching around trees, shrubs, and in flower beds can result in a ten-fold reduction in evaporative water loss from soil.
Kratsch, Heidi, "Water-Wise Landscaping: Mulch" (2007). All Current Publications. Paper 1089.