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Preheat oven to 350 degree F and grease a 13"x9" baking pan with cooking spray.
Bring a large pot of water to a boil. Scrub potatoes and place them, whole, into the boiling water. Cook for about 20 minutes. Remove from the water and let sit until cool enough to handle.
Meanwhile, make the cheese sauce. Melt butter in a medium saucepan over medium heat. Whisk in flour and cook, whisking constantly, until flour is golden brown; about 2 minutes. Stir in milk and cook, stirring often, until thickened; about 2-3 minutes. Remove from heat and stir in shredded cheese. Season with salt and pepper. If the sauce seems too thick, you can stir in up to 1/4 of a cup of milk.
Gently peel potatoes and slice into 1/8 inch rounds. Place 1/3 of the potatoes overlapping in a single layer in the baking dish, seasoning with salt and pepper. Top with about half of the ham. Spoon about 1/3 of the cheese sauce on top of the potatoes and ham.
Repeat with another layer of potatoes, ham and cheese sauce, then finish with a final layer of potatoes and pour all of the remaining cheese sauce over the top layer of potatoes. Spread to ensure all of the potatoes are covered.
Sprinkle with 1/4 cup shredded cheddar (if desired) and paprika (about 1/8-1/4 teaspoon).
Bake in the 350 degree oven for 20-25 minutes, or until sauce is bubbly.
Garnish with fresh minced chives and serve immediately.