Bring water to boil. Add potatoes, carrots, celery, onion, salt and pepper. Cover and simmer 10 min. or until tender. Melt butter in large saucepan. Blend in flour; stir in milk gradually. (You can add a pinch of soda to prevent curdling of milk.) Cook over medium heat until boiling while stirring constantly. Stir in cheese until melted; add to vegetables; add ham. Heat thoroghly. Do NOT boil.