Moving in this material (which has included both mulch and composted material) has taken quite an effort, and there are other reasons for this work besides adding to the beauty of the park. The benefits to the trees, as I understand it, are primarily to provide a layer of protection from feet, paws, and anything else that can poke or gouge the tree's roots (obviously, with roots near the surface being the most vulnerable). In addition, the fresh soil brings nutrients and, compared to a carpet of grass, helps the roots to breathe. Lastly, since mulch suppresses weeds and grass, there's no need for the lawnmowers to ride right up to (and occasionally scar) the tree trunks.
Building these rings to the circumference of the tree's branches leaves plenty of room for people looking for a picnic on the grass, and hopefully will lead to fewer uprooted trees, such as these two which crashed down (or, to look at it another way, sprang up) in February 2010. One of my goals this year is to find a way to support the effort to improve soil quality across the entire park, including grassy areas. Not only would that make a better looking park with healthier plants, but it has the potential to reduce the demand for irrigation, a major drain on the city's budget.
One online source confirms that mulching around trees is "good horticultural practice" and lists an additional benefit I had overlooked: it "absorbs dog piddle."