"Conditions of extreme peril to the safety of persons and property now exist in the City of Sausalio, caused by dangerous and sometimes criminal activities at and surrounding the area at Marinship Park designated for transitional overnight sleeping by persons who have no option to sleep indoors," the declaration reads in part.
Southern Marin Fire Department in a separate news release said one tent fully engulfed in flames spread to another tent causing minimal damage in Wednesday night's incident.
Sausalito police said they were dispatched to the area around 7:15 p.m. to the park after an explosion could be heard "throughout the town."
No injuries were reported.
Bystanders said they saw a suspicious person in the area who returned to the scene and was questioned by authorities.
Police said, Debra Ellen Hazelwood, 61, a resident of the encampment, was arrested shortly afterward.
Police said she admitted to using a cigarette lighter to set both tents on fire. One tent had a propane tank. The other tent turned out to be her own.
Hazlewood is charged with felony arson and was booked into the Marin County Jail, police said. Her bail is set at $150,000 after police requested an enhancement.