In the Southwest United States attempts to improve the health and habitat value of riparian areas have focused on environmental restoration and preservation activities. In this predominantly arid region, many environmental enhancement activities require supplemental irrigation water. Identifying available water sources and raising funds to secure water supplies can be a barrier to the implementation or continuation of environmental enhancement activities. Few mechanisms currently exist to address this need for environmental water supplies. In this report, we present the concept of a Water Conservation Banking program. Water Conservation Banking refers to voluntary municipal water conservation programs designed to increase water Productivity and Efficiency and generate revenue to support environmental enhancement activities. This report presents a study of the feasibility of such a program. Key issues in the development of a municipal water conservation program aimed at providing water for the environment were investigated and analyzed.