That is definitely true about the mulch Rose. I just figured that out this year but I think that the next time I mulch anything it will be with pine bark mini nuggets. They look nicer, IMO, and they let the rain penetrate rather than forming a dense mat.
I really feel for you all out there in CA and AZ. My parents live in Phoenix and they haven't seen much in the way of rain. They said that they've only gotten 1" this whole year so far and they broke their old rainless record of 122 days by two days. I really hope rain comes to you this winter.