For an improvement project under section 40-22.1-01 and defraying the costs of the project by special assessments, a municipality may create and alter a business improvement district by ordinance or resolution. The governing body of the municipality shall designate the district by an appropriate name and by a number distinguishing it from other improvement districts. A municipality may make and finance any improvement and levy special assessments for the improvement under any alternate procedure in this title. If the proposal for creation of an improvement project under this chapter is made by any person, group, or entity that is not an officer, board, or agency of the municipality, the person, group, or entity shall file a bond or other sufficient security, payable to the municipality, to defray all costs incurred if the improvement project is later barred under section 40-22.1-08. The bond or other sufficient security must be filed with the city auditor prior to the initiation of any further proceedings under this chapter. The governing body of the municipality shall determine the amount and form of the bond or other sufficient security.