Earlier this week, Massachusetts sent New Hampshire $600,000 in partial payments.

In a phone call today, Gov. Romney committed to Gov. Lynch that he would appoint an arbiter to settle the differences between the two states.

"I appreciate Gov. Romney's willingness to take this issue seriously and make partial back payments and to commit to arbitration. Massachusetts still owes New Hampshire communities more than $2 million, but I am pleased that after more than a decade we are finally seeing action on this important issue," Gov. Lynch said. "These dams, as we saw during the May floods, play an important role in protecting Massachusetts communities and it is important that Massachusetts keep the promises it made."

New Hampshire and Massachusetts entered the Merrimack River Valley Flood Control Compact in 1957. Under the Compact, Massachusetts agreed to reimburse New Hampshire 70 percent of the amount of property taxes lost because of the acquisition and ownership of the dams and reservoirs comprising the Merrimack River Valley Flood Control Project.

Massachusetts has not paid the full amount due under the Compact in more than a decade, and up until now has refused to appoint membership to the Board of Arbitration established in the compact to settle any disputes on the amount owed. Last week, Gov. Lynch wrote a letter to Gov. Romney saying that New Hampshire would take legal action if Massachusetts did not act to either pay the amount owed or move to arbitration.