What the trees are worth would depend on several factors including whether the trees were mature and provided shade, fruit or some other benefit to the neighbor. You could probably have a local nursery replace two trees at half that cost. You could go to a nursery and find out what they would charge to sell you two trees and install them and then offer that amount to your neighbor.
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Unfortunately, $1500 sounds more than reasonable. Depending on how big the trees are, the only way to replace them would be to plant small trees and let them grow over years or decades. Cutting trees, especially in an area like Sacramento where they are highly valued, can seriously affect the value of property.
Yes that sounds reasonable, especially since you could be subject to penalties of up to 3 times the value of the tree and punitive damages if they decide to sue you. Recently, there was one case that resulted in a neighbor being hit with an award of 100,000 plus an additional 100,000 in punitive damages just for one tree.
It would be wise and worth your investment to hire an attorney to draft a settlement and release agreement for your neighbor to sign in return for the payment.