Melt 3 T. butter in a 2 qt. saucepan over medium-low heat.

Stir in flour, salt, pepper and nutmeg.

Slowly whisk in half and half.

Stir in cream cheese. Increase heat to medium, whisk mixture constantly until thick and smooth. Remove from heat and set aside.

In a skillet over medium-high heat, cook onions and garlic in remaining butter until transparent. Stir spinach and water into pan. Reduce heat to medium-low and cover. Simmer for 8 min. stirring occasionally.

Stir spinach mixture into creamy mixture and return to medium-high stirring often until warmed through.

Remove from heat and fold in Parmesan cheese.