There are many approaches to saving water in a school.
Wasting paper towels is one of the aspects of hand washing and something that can change overnight. Getting students involved with a simple behavioral change can set the stage for immediate success and further changes later. Try posting this graphic near the paper towel dispenser. Download it from this link.
Several of my Green Schools have mentioned big drops in towel use after my visit. It could be a nice experiment to try with an elementary school.
Automatic equipment saves with every use and can pay for itself quickly. This unit is relatively new and has a very effective design. Costing these units out is always difficult. There's a higher electric bill but there are no paper towels to buy and no personnel time involved to fill a towel dispenser and dump the trash.
A waterless urinal is another water saving piece of equipment. They do require that the special fluid inside be renewed periodically but they seem to make a lot of sense.
At Greensburg I saw a very cool water collection system. It was designed in from the start but looks great and is very effective. Perhaps you can see the downspouts feeding into a trough which collects the water and sends it to underground storage. The students can see the system and watch it work when it rains. It's pretty dry out there and collecting rain water for landscape use makes a lot of sense. Here are the tanks that store the water from the roof of the gymnasium.
Rain barrels and rain gardens are very popular. They're less costly and more student friendly than these giant projects. Two great sources for rain barrels and gardens are from the Mid-America Regional Council. This one for rain barrels and this one for rain gardens.
Rain barrels can save watering costs and reduce the impact of storm water.