Answer: Composted wood chips can be used as a source of organic matter in soil preparation, partially decomposed chips can be used as mulch in flower beds and newer chips can be used as mulch in shrub beds. It is best to age them for at least a year before use and it is usually a good idea to add some nitrogen along with wood chips; the amount to add would be determined by the results of soil tests. Your County Extension (839-4712) can help you with the soil tests and interpreting the results.
Sandy soil benefits greatly from the addition of lots of organic material, so it should be fine to dig them into the iris bed anduse them as mulch. Iris however also need very good drainage and resent being covered with mulch, so do not mulch over top of the rhizomes or you may invite rot.
Iris need to be reset every three years or so when they become crowded. Unfortunately, the only way to delay lifting and dividing them is to plant them further apart to begin with.
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