For #3, The conclusion of the argument is that the town can change the council's membership if everyone follows the citizens plan. Here's the plan: a) campaign against incumbents, but b) only cast a vote for the incumbent from his or her own neighborhood, then the council's membership would be substantially changed. The stimulus explains that voters can only vote for a representative from his or her own neighborhood and asks us what we'd need to assume for the plan to actually result in changing the council's membership.
If you take a moment to think about the plan, it doesn't really make sense. If everyone were to vote for their own neighborhood incumbent rep, wouldn't all of those incumbents be voted back in?! So, for there to actually be a change in the council membership, they'll need some people to not vote for their own incumbent, as (A) suggests, so that there can actually be some change.
(B) is irrelevant - there's no discussion of the number of voters.
(C) is similarly irrelevant - past attempts?
(D) is tempting - maybe we need the incumbents to be reaching the end of their terms to be able to shake up the council. But that's when we vote for folks - when their term is up! So, that actually allows us to vote for them again.
(E) is also tempting but it actually hurts the argument. We would want the newcomers - the challengers - to be better able to serve their neighborhoods, not worse!