In a 2-quart saucepan cook chopped onion and garlic in butter or margarine till tender.
Stir in flour, salt, and pepper.
Add milk and chicken broth all at once.
Cook and stir over medium heat till slightly thickened and bubbly; cook and stir 1 minute more.
Stir in chopped tomato and chopped chili peppers.
Add shredded Monterey Jack cheese; cook over low heat till melted, stirring constantly.
Garnish each serving with avocado slices and paprika, if desired.