diff --git a/.env b/.env
new file mode 100644
index 00000000..62e1ed87
--- /dev/null
+++ b/.env
@@ -0,0 +1,20 @@
+# DO NOT STORE SECRETS HERE.
+# Use .env.development for local secrets.
+
+REDIS_URL=redis://localhost:6379
+
+# CI/CD
+TEST_RETRY=0
+CI=false
+
+# Mail
+MAILER_DEFAULT_HOST=localhost
+MAILER_DEFAULT_PORT=3000
+MAILER_SENDER=Test <noreply@nimblehq.co>
+
+# Locales
+AVAILABLE_LOCALES=en
+DEFAULT_LOCALE=en
+FALLBACK_LOCALES=en
+
+SECRET_KEY_BASE=replace_with_lengthy_secure_hex
diff --git a/.env.development.example b/.env.development.example
new file mode 100644
index 00000000..6ab4e54b
--- /dev/null
+++ b/.env.development.example
@@ -0,0 +1,5 @@
+# DO NOT COMMIT THIS FILE (`.env.development`)
+# Rename it to `.env.development` and use it for local secrets only.
+
+# Used to verify the integrity of signed cookies. so ensure a secure value is set
+SECRET_KEY_BASE=replace_with_lengthy_secure_hex
diff --git a/.gitignore.rb b/.gitignore.rb
index 5160ebf0..a6687030 100644
--- a/.gitignore.rb
+++ b/.gitignore.rb
@@ -10,5 +10,8 @@
 
     # Ignore the test coverage results from SimpleCov
     /coverage
+
+    # Ignore environment variables files
+    .env.development
   IGNORE
 end
diff --git a/.template/addons/docker/.env.tt b/.template/addons/docker/.env.tt
deleted file mode 100644
index 7be3e1c5..00000000
--- a/.template/addons/docker/.env.tt
+++ /dev/null
@@ -1,6 +0,0 @@
-DOCKER_REGISTRY_HOST=<%= DOCKER_REGISTRY_HOST %>
-DOCKER_IMAGE=<%= DOCKER_IMAGE %>
-BRANCH_TAG=latest
-PORT=80
-CI=false
-TEST_RETRY=0
diff --git a/.template/addons/docker/Dockerfile.tt b/.template/addons/docker/Dockerfile.tt
index 22bb1f9e..aa9f41a9 100644
--- a/.template/addons/docker/Dockerfile.tt
+++ b/.template/addons/docker/Dockerfile.tt
@@ -98,8 +98,11 @@ COPY . ./
 RUN rm -rf tmp/docker
 
 <%- if WEB_VARIANT -%>
+
 # Compile assets
-RUN bin/docker-assets-precompile
+RUN bundle exec rails i18n:js:export
+RUN bundle exec rails assets:precompile --trace
+RUN yarn postcss
 
 <%- end -%>
 EXPOSE $PORT
diff --git a/.template/addons/docker/template.rb b/.template/addons/docker/template.rb
index 18b65679..a2ee54ce 100644
--- a/.template/addons/docker/template.rb
+++ b/.template/addons/docker/template.rb
@@ -6,5 +6,16 @@
 template 'docker-compose.dev.yml.tt'
 template 'docker-compose.test.yml.tt'
 template 'docker-compose.yml.tt'
-template '.env.tt'
 template '.dockerignore.tt'
+
+append_to_file '.env' do
+  <<~ENVEXAMPLE
+
+    # Docker
+    APP_NAME=#{APP_NAME}
+    DOCKER_REGISTRY_HOST=#{DOCKER_REGISTRY_HOST}
+    DOCKER_IMAGE=#{DOCKER_IMAGE}
+    BRANCH_TAG=latest
+    PORT=80
+  ENVEXAMPLE
+end
diff --git a/.template/spec/addons/base/docker/template_spec.rb b/.template/spec/addons/base/docker/template_spec.rb
index 208b3741..875edc76 100644
--- a/.template/spec/addons/base/docker/template_spec.rb
+++ b/.template/spec/addons/base/docker/template_spec.rb
@@ -5,10 +5,6 @@
     expect(file('Dockerfile')).to exist
   end
 
-  it 'creates the docker env file' do
-    expect(file('.env')).to exist
-  end
-
   it 'creates the docker ignore file' do
     expect(file('.dockerignore')).to exist
   end
diff --git a/.template/spec/base/bin/template_spec.rb b/.template/spec/base/bin/template_spec.rb
index d5e7e629..4943515d 100644
--- a/.template/spec/base/bin/template_spec.rb
+++ b/.template/spec/base/bin/template_spec.rb
@@ -30,9 +30,4 @@
     expect(file('bin/docker-prepare')).to exist
     expect(file('bin/docker-prepare')).to be_executable
   end
-
-  it 'creates the docker asset precompile script' do
-    expect(file('bin/docker-assets-precompile')).to exist
-    expect(file('bin/docker-assets-precompile')).to be_executable
-  end
 end
diff --git a/.template/spec/base/config/template_spec.rb b/.template/spec/base/config/template_spec.rb
index 412862d1..8bbf2228 100644
--- a/.template/spec/base/config/template_spec.rb
+++ b/.template/spec/base/config/template_spec.rb
@@ -1,8 +1,8 @@
 # frozen_string_literal: true
 
 describe '/config template' do
-  it 'creates the Figaro configuration for application variables' do
-    expect(file('config/application.yml')).to exist
+  it 'does NOT create the application.yml config' do
+    expect(file('config/application.yml')).not_to exist
   end
 
   it 'creates the database configuration' do
diff --git a/.template/spec/base/template_spec.rb b/.template/spec/base/template_spec.rb
index 430f1fef..68e015e9 100644
--- a/.template/spec/base/template_spec.rb
+++ b/.template/spec/base/template_spec.rb
@@ -30,4 +30,12 @@
   it 'creates Reek configuration files' do
     expect(file('.reek.yml')).to exist
   end
+
+  it 'creates .env file' do
+    expect(file('.env')).to exist
+  end
+
+  it 'creates .env.development.example file' do
+    expect(file('.env.development.example')).to exist
+  end
 end
diff --git a/.template/variants/web/package.json.rb b/.template/variants/web/package.json.rb
index 8754d306..c0f2b80d 100644
--- a/.template/variants/web/package.json.rb
+++ b/.template/variants/web/package.json.rb
@@ -29,8 +29,9 @@
 run 'yarn add postcss postcss-cli autoprefixer'
 
 run 'yarn add --dev @nimblehq/eslint-config-nimble@2.2.1'
-run 'yarn add --dev stylelint'
+run 'yarn add --dev stylelint@14'
 run 'yarn add --dev @nimblehq/stylelint-config-nimble'
+
 # Setup scripts
 run 'npm set-script eslint "eslint . --color"'
 run 'npm set-script eslint:fix "eslint . --color --fix"'
diff --git a/.template/variants/web/template.rb b/.template/variants/web/template.rb
index 83660a38..fa1bdc3b 100644
--- a/.template/variants/web/template.rb
+++ b/.template/variants/web/template.rb
@@ -28,14 +28,13 @@ def apply_web_variant!
 
   after_bundle do
     use_source_path __dir__
-
-    # Generate translation file
-    run 'bin/rake i18n:js:export'
-
     # Fix the default Rails template that does not put trailing commas
     run 'yarn run codebase:fix'
 
     apply 'spec/template.rb'
+
+    # Generate translation file
+    run 'bundle exec rake i18n:js:export'
   end
 end
 
diff --git a/Gemfile.tt b/Gemfile.tt
index 8d603fe6..7a48a9fb 100644
--- a/Gemfile.tt
+++ b/Gemfile.tt
@@ -8,6 +8,7 @@ gem 'puma' # Use Puma as the app server
 gem 'mini_magick' # A ruby wrapper for ImageMagick or GraphicsMagick command line
 gem 'pagy' # A pagination gem that is very light and fast
 gem 'discard' # Soft deletes for ActiveRecord
+gem 'dotenv-rails' # Shim to load environment variables from .env into ENV in development
 gem 'sidekiq' # background processing for Ruby
 gem 'sassc' # bootsnap dependency
 gem 'bootsnap', require: false # Reduces boot times through caching; required in config/boot.rb
@@ -41,7 +42,6 @@ group :development, :test do
   # gem 'debug', platforms: %i[ mri mingw x64_mingw ] # Official debug
 
   # Utilities
-  gem 'figaro' # Simple Rails app configuration
   gem 'listen' # Listens to file modifications
   gem 'letter_opener' # Preview mail in the browser instead of sending
   gem 'ffaker' # A library for generating fake data such as names, addresses, and phone numbers
diff --git a/Makefile b/Makefile
index 4015127d..8a89c20e 100644
--- a/Makefile
+++ b/Makefile
@@ -48,7 +48,7 @@ test_template:
 	if [ $(VARIANT) = web ]; then \
 		bundle exec rspec --pattern="${base_spec}, ${web_spec}, ${base_addon_spec}, ${web_addon_spec}" --format progress; \
 	elif [ $(VARIANT) = api ]; then \
-		bundle exec rspec --pattern="${base_spec}, ${api_spec}, ${base_addon_spec}, ${api_addon_spec}" --format progress; \
+		bundle exec rspec --pattern="${base_spec}, ${api_spec}, ${base_addon_spec}, ${api_addon_spec}"; \
 	fi;
 
 cleanup:
diff --git a/bin/docker-assets-precompile b/bin/docker-assets-precompile
deleted file mode 100755
index a5b95c27..00000000
--- a/bin/docker-assets-precompile
+++ /dev/null
@@ -1,24 +0,0 @@
-#!/usr/bin/env ruby
-# frozen_string_literal: true
-
-# For building production docker image
-#
-# It sets the envs inside the docker image for precompiling the assets
-# Because to precompile the assets, Rails initializes the app.
-# And it requires the envs as we always use `ENV.fetch` to setup the variables
-#
-# Related issue: https://github.com/rails/rails/issues/32947
-# TODO: https://github.com/nimblehq/rails-templates/issues/326
-
-require 'yaml'
-
-rails_env = ENV.fetch('RAILS_ENV', 'production')
-
-if rails_env == 'production'
-  docker_build_envs = YAML.load_file('config/application.yml')['docker_build']
-  docker_build_envs.each { |name, value| ENV[name] = value }
-
-  ENV['DATABASE_URL'] = 'postgres://postgres:postgres@postgres:5432/postgres'
-end
-
-exit system('bin/rails i18n:js:export && bin/rails assets:precompile && yarn postcss')
diff --git a/bin/start.sh b/bin/start.sh
index 941c7423..9b28fbf4 100755
--- a/bin/start.sh
+++ b/bin/start.sh
@@ -7,6 +7,9 @@ if [ -f tmp/pids/server.pid ]; then
   rm -f tmp/pids/server.pid
 fi
 
+bundle install
+bundle update
+
 # Run pending migrations (if any) and start rails
 bundle exec rails db:migrate
 bundle exec rails s -p $PORT -b 0.0.0.0
diff --git a/bin/template.rb b/bin/template.rb
index eabab904..5a92ad14 100644
--- a/bin/template.rb
+++ b/bin/template.rb
@@ -7,4 +7,3 @@
 copy_file 'bin/worker.sh', mode: :preserve
 copy_file 'bin/dev', mode: :preserve
 copy_file 'bin/docker-prepare', mode: :preserve
-copy_file 'bin/docker-assets-precompile', mode: :preserve
diff --git a/config/application.yml.tt b/config/application.yml.tt
deleted file mode 100644
index cdc23963..00000000
--- a/config/application.yml.tt
+++ /dev/null
@@ -1,25 +0,0 @@
-default: &default
-  DB_NAME: "<%= APP_NAME %>"
-  DB_HOST: "localhost"
-  DB_PORT: "5432"
-  DB_USERNAME: "postgres"
-  DB_PASSWORD: "postgres"
-  MAILER_DEFAULT_HOST: "localhost"
-  MAILER_DEFAULT_PORT: "3000"
-  MAILER_SENDER: "Test <noreply@nimblehq.co>"
-  AVAILABLE_LOCALES: "en"
-  DEFAULT_LOCALE: "en"
-  FALLBACK_LOCALES: "en"
-
-development:
-  <<: *default
-
-test:
-  <<: *default
-  TEST_RETRY: "0"
-
-# Set environment variables required in the initializers in order to precompile the assets.
-# Because it initializes the app, so all variables need to exist in the Docker build stage (used in bin/docker-assets-precompile).
-docker_build:
-  <<: *default
-  SECRET_KEY_BASE: dummy_secret_key_base
diff --git a/config/database.yml b/config/database.yml
deleted file mode 100644
index c75c989a..00000000
--- a/config/database.yml
+++ /dev/null
@@ -1,23 +0,0 @@
-default: &default
-  adapter: postgresql
-  encoding: unicode
-  pool: 5
-
-development:
-  <<: *default
-  host:     <%= ENV['DB_HOST'] %>
-  port:     <%= ENV['DB_PORT'] %>
-  username: <%= ENV['DB_USERNAME'] %>
-  password: <%= ENV['DB_PASSWORD'] %>
-  database: <%= ENV['DB_NAME'] %>_development
-
-test:
-  <<: *default
-  host:     <%= ENV['DB_HOST'] %>
-  port:     <%= ENV['DB_PORT'] %>
-  username: <%= ENV['DB_USERNAME'] %>
-  password: <%= ENV['DB_PASSWORD'] %>
-  database: <%= ENV['DB_NAME'] %>_test
-
-production:
-  url: <%= ENV['DATABASE_URL'] %>
diff --git a/config/database.yml.tt b/config/database.yml.tt
new file mode 100644
index 00000000..2e473563
--- /dev/null
+++ b/config/database.yml.tt
@@ -0,0 +1,23 @@
+default: &default
+  adapter: postgresql
+  encoding: unicode
+  pool: 5
+
+development:
+  <<: *default
+  host:     <%= ENV.fetch('DB_HOST') { 'localhost' } %>
+  port:     <%= ENV.fetch('DB_PORT') { 5432 } %>
+  username: <%= ENV.fetch('DB_USERNAME') { 'postgres' } %>
+  password: <%= ENV.fetch('DB_PASSWORD') { 'postgres' } %>
+  database: <%= ENV.fetch('DB_NAME') { APP_NAME } %>_development
+
+test:
+  <<: *default
+  host:     <%= ENV.fetch('DB_HOST') { 'localhost' } %>
+  port:     <%= ENV.fetch('DB_PORT') { 5432 } %>
+  username: <%= ENV.fetch('DB_USERNAME') { 'postgres' } %>
+  password: <%= ENV.fetch('DB_PASSWORD') { 'postgres' } %>
+  database: <%= ENV.fetch('DB_NAME') { APP_NAME } %>_test
+
+production:
+  url: <%= ENV.fetch('DATABASE_URL') { '' } %>
diff --git a/config/template.rb b/config/template.rb
index 74caecb6..69f0091d 100644
--- a/config/template.rb
+++ b/config/template.rb
@@ -2,8 +2,7 @@
 
 apply 'config/application.rb'
 
-template 'config/application.yml.tt'
-copy_file 'config/database.yml', force: true
+template 'config/database.yml.tt', force: true
 copy_file 'config/sidekiq.yml'
 
 apply 'config/environments/development.rb'
diff --git a/template.rb b/template.rb
index f8bb4a87..df16ab4c 100644
--- a/template.rb
+++ b/template.rb
@@ -34,6 +34,8 @@ def apply_template!(template_root)
 
   copy_file '.flayignore'
   copy_file 'Dangerfile'
+  copy_file '.env'
+  copy_file '.env.development.example'
   copy_file '.rubocop.yml'
   copy_file '.reek.yml'