In large saucepan, bring water and salt to a boil. Add potatoes, onion and carrots; cook, covered, for about 5 minutes or until partially tender. Drain. Make cheese sauce by melting butter in small saucepan. Stir in flour, salt, pepper and cayenne, stirring constantly, about 1 minute. Remove from heat; stir in milk and blend well. Brin mixture to boil over medium heat, stirring until thick and smooth. Add 1 cup cheese; stir until melted. Layer half of vegetables in greased 2 1/2 quart casserole; top with half of cheese sauce. Top with remaining cheese. Bake, covered with foil, at 375 for 30 minutes. Foil may be removed for last 10 minutes to brown top. Yield 6 servings.