How can my public art program do a better job of engaging our local community?

There is not a one-size-fits-all solution for community engagement.  Each community has different needs and interests, and those must be taken into account when developing a plan for community engagement.  Similarly, it is important to be realistic about what the commission is and what it can do, and to adequately communicate those expectations to the affected community.
In order to foster community stakeholders, it is important to give the community the chance for meaningful and substantive input.  If a commission’s site, budget, or form are already settled, then a community may not feel as though their input has any real value.  For this reason, it is important to involve community members early in the commissioning process and, where possible, provide concrete and consequential opportunities for their voices to be heard and acted upon.
Finally, do not be afraid of reorienting, or even starting over, if a commission is not reaching the desired levels of engagement.  Sometimes the best option is a fresh start.