Preheat oven to 350°F. Spray a 2 quart baking dish with olive oil spray and set aside.
Place the potatoes in a large pot and cover with water. Bring to a boil over medium heat. Reduce the heat and simmer until the potatoes are just tender, about 8 minutes. Drain and set aside to cool.
3 pounds Yukon Gold potatoes
Melt the butter in a large saucepan set over medium heat. Add the garlic and cook for 30 seconds, then stir in the flour until well combined.
4 tablespoons unsalted butter, 3 cloves garlic, ¼ cup all-purpose flour
Slowly whisk in the chicken broth, cook for 1 minute, then stir in the milk. Whisk until smooth, seasoning with salt, pepper, and nutmeg. Continue cooking for 1-2 minutes, until the sauce thickens.
2 cups low-sodium chicken broth, 2 cups milk, ½ teaspoon kosher salt, ½ teaspoon ground black pepper, ⅛ teaspoon ground nutmeg
Remove the saucepan from the heat and stir in 1 cup of cheddar cheese until melted.
2½ cups freshly shredded cheddar cheese
Spread ¼ cup of the sauce over the prepared baking dish. Arrange ⅓ of the sliced potatoes evenly over the sauce. Top with ⅓ of the sauce to cover the potatoes, then sprinkle with ⅓ cup of the cheddar cheese and ⅓ of the bacon. Continue layering two more times in that order with the remaining potatoes, sauce, cheese, and bacon and repeat. Sprinkle the rest of the cheese on top.
½ cup cooked bacon crumbles
Cover with foil and bake for 25-30 minutes. Uncover and continue baking for another 5 minutes or until the potatoes are fork tender. Turn the broiler to high and brown the cheese, if desired.
Garnish with chives and serve warm.
Chopped fresh chives