Place potatoes and water in a large saucepan. Bring to a boil. Reduce heat; cover and simmer for 15-20 minutes or until tender.
Meanwhile, in another large saucepan, saute onion in butter until tender. Stir in the flour, salt, thyme, rosemary and pepper until blended. Gradually add milk. Bring to a boil; cook and stir for 2 minutes or until thickened. Add potatoes with cooking liquid; heat through.