diff --git a/.env.example b/.env.template
similarity index 87%
rename from .env.example
rename to .env.template
index 7af650cc..7ace7923 100644
--- a/.env.example
+++ b/.env.template
@@ -1,11 +1,15 @@
-# .env.example
+# .env.template
+# This file can be used as a template for the .env file. Copy this file to .env and modify the values as needed.
 
+################
 # Lumigator container control
 # Set to "TRUE" if the containers need to be up and running after
 # a test target failed (e.g. in CI where containers are inspected
 # for logs after failed steps)
 KEEP_CONTAINERS_UP="FALSE"
+################
 
+################
 # Lumigator API configuration
 # LUMI_API_CORS_ALLOWED_ORIGINS:
 # Comma separated list of origins (See: https://developer.mozilla.org/en-US/docs/Glossary/Origin)
@@ -15,6 +19,9 @@ KEEP_CONTAINERS_UP="FALSE"
 # To allow CORS requests from anywhere specify "*" as any, or the only value.
 # e.g. "*"
 LUMI_API_CORS_ALLOWED_ORIGINS=${LUMI_API_CORS_ALLOWED_ORIGINS:-http://localhost,http://localhost:3000}
+################
+
+################
 # AWS Variables for S3 Object Storage
 # Configure these for AWS access, or use defaults for local development with minio.
 AWS_ACCESS_KEY_ID=${AWS_ACCESS_KEY_ID:-lumigator}
@@ -23,6 +30,8 @@ AWS_DEFAULT_REGION=${AWS_DEFAULT_REGION:-us-east-2}
 # Default is the default api port used by minio
 AWS_ENDPOINT_URL=${AWS_ENDPOINT_URL:-http://localhost:9000}
 S3_BUCKET=${S3_BUCKET:-lumigator-storage}
+
+#######################
 # Ray Cluster Configuration
 # These settings are for the local Ray setup. To use an external Ray cluster, you MUST use an external S3-compatible storage
 # to ensure the Ray workers can access data from your Lumigator server.
diff --git a/Makefile b/Makefile
index e4f15952..dc939f0b 100644
--- a/Makefile
+++ b/Makefile
@@ -1,13 +1,11 @@
-.PHONY: local-up local-down local-logs clean-docker-buildcache clean-docker-images clean-docker-containers start-lumigator-external-services start-lumigator stop-lumigator test-sdk-unit test-sdk-integration test-sdk-integration-containers test-sdk test-backend-unit test-backend-integration test-backend-integration-containers test-backend test-jobs-evaluation-unit test-jobs-inference-unit test-jobs test-all
+.PHONY: local-up local-down local-logs clean-docker-buildcache clean-docker-images clean-docker-containers start-lumigator-external-services start-lumigator stop-lumigator test-sdk-unit test-sdk-integration test-sdk-integration-containers test-sdk test-backend-unit test-backend-integration test-backend-integration-containers test-backend test-jobs-evaluation-unit test-jobs-inference-unit test-jobs test-all check-dot-env
 
 SHELL:=/bin/bash
 UNAME:= $(shell uname -o)
 PROJECT_ROOT := $(shell git rev-parse --show-toplevel)
 CONTAINERS_RUNNING := $(shell docker ps -q --filter "name=lumigator-")
 
-KEEP_CONTAINERS_UP := $(shell grep -E '^KEEP_CONTAINERS_UP=' .env | cut -d'=' -f2 | tr -d '"')
-
-KEEP_CONTAINERS_UP ?= "FALSE"
+KEEP_CONTAINERS_UP := $(shell grep -E '^KEEP_CONTAINERS_UP=' .env | cut -d'=' -f2 | tr -d '"' || echo "FALSE")
 
 # used in docker-compose to choose the right Ray image
 ARCH := $(shell uname -m)
@@ -71,11 +69,11 @@ endef
 LOCAL_DOCKERCOMPOSE_FILE:= docker-compose.yaml
 DEV_DOCKER_COMPOSE_FILE:= .devcontainer/docker-compose.override.yaml
 
-.env:
-	@if [ ! -f .env ]; then cp .env.example .env; echo ".env created from .env.example"; fi
+check-dot-env:
+	@if [ ! -f .env ]; then cp .env.template .env; echo ".env created from .env.template"; fi
 
 # Launches Lumigator in 'development' mode (all services running locally, code mounted in)
-local-up: .env
+local-up: check-dot-env
 	uv run pre-commit install
 	RAY_ARCH_SUFFIX=$(RAY_ARCH_SUFFIX) docker compose --profile local -f $(LOCAL_DOCKERCOMPOSE_FILE) -f ${DEV_DOCKER_COMPOSE_FILE} up --watch --build
 
@@ -86,15 +84,15 @@ local-logs:
 	docker compose -f $(LOCAL_DOCKERCOMPOSE_FILE) logs
 
 # Launches lumigator in 'user-local' mode (All services running locally, using latest docker container, no code mounted in)
-start-lumigator: .env
+start-lumigator: check-dot-env
 	RAY_ARCH_SUFFIX=$(RAY_ARCH_SUFFIX) docker compose --profile local -f $(LOCAL_DOCKERCOMPOSE_FILE) up -d
 
 # Launches lumigator with no code mounted in, and forces build of containers (used in CI for integration tests)
-start-lumigator-build: .env
+start-lumigator-build: check-dot-env
 	RAY_ARCH_SUFFIX=$(RAY_ARCH_SUFFIX) docker compose --profile local -f $(LOCAL_DOCKERCOMPOSE_FILE) up -d --build
 
 # Launches lumigator without local dependencies (ray, S3)
-start-lumigator-external-services: .env
+start-lumigator-external-services: check-dot-env
 	docker compose -f $(LOCAL_DOCKERCOMPOSE_FILE) up -d
 
 stop-lumigator:
@@ -146,12 +144,26 @@ test-sdk: test-sdk-unit test-sdk-integration-containers
 # start them if they are not present or use the currently running ones.
 test-backend-unit:
 	cd lumigator/python/mzai/backend/; \
-	SQLALCHEMY_DATABASE_URL=sqlite:////tmp/local.db uv run pytest -o python_files="backend/tests/unit/*/test_*.py"
+	S3_BUCKET=lumigator-storage \
+	RAY_HEAD_NODE_HOST=localhost \
+	RAY_DASHBOARD_PORT=8265 \
+	SQLALCHEMY_DATABASE_URL=sqlite:////tmp/local.db \
+	uv run pytest -o python_files="backend/tests/unit/*/test_*.py"
 
 test-backend-integration:
 	cd lumigator/python/mzai/backend/; \
 	docker container list --all; \
-	SQLALCHEMY_DATABASE_URL=sqlite:////tmp/local.db RAY_WORKER_GPUS="0.0" RAY_WORKER_GPUS_FRACTION="0.0" INFERENCE_PIP_REQS=../jobs/inference/requirements_cpu.txt INFERENCE_WORK_DIR=../jobs/inference EVALUATOR_PIP_REQS=../jobs/evaluator/requirements.txt EVALUATOR_WORK_DIR=../jobs/evaluator uv run pytest -s -o python_files="backend/tests/integration/*/test_*.py"
+	S3_BUCKET=lumigator-storage \
+	RAY_HEAD_NODE_HOST=localhost \
+	RAY_DASHBOARD_PORT=8265 \
+	SQLALCHEMY_DATABASE_URL=sqlite:////tmp/local.db \
+	RAY_WORKER_GPUS="0.0" \
+	RAY_WORKER_GPUS_FRACTION="0.0" \
+	INFERENCE_PIP_REQS=../jobs/inference/requirements_cpu.txt \
+	INFERENCE_WORK_DIR=../jobs/inference \
+	EVALUATOR_PIP_REQS=../jobs/evaluator/requirements.txt \
+	EVALUATOR_WORK_DIR=../jobs/evaluator \
+	uv run pytest -s -o python_files="backend/tests/integration/*/test_*.py"
 
 test-backend-integration-containers:
 ifeq ($(CONTAINERS_RUNNING),)
diff --git a/docs/source/user-guides/inference.md b/docs/source/user-guides/inference.md
index 3838fd6f..5324b1c8 100644
--- a/docs/source/user-guides/inference.md
+++ b/docs/source/user-guides/inference.md
@@ -7,7 +7,7 @@ text data.
 ```{note}
 You can also use the OpenAI GPT family of models or the Mistal API to run an inference job. To do
 so, you need to set the appropriate environment variables: `OPENAI_API_KEY` or `MISTRAL_API_KEY`.
-Refer to the `.env.example` file in the repository for more details.
+Refer to the `.env.template` file in the repository for more details.
 ```
 
 ## What You'll Need
diff --git a/lumigator/python/mzai/backend/backend/settings.py b/lumigator/python/mzai/backend/backend/settings.py
index eb04a5a6..a8c2d15d 100644
--- a/lumigator/python/mzai/backend/backend/settings.py
+++ b/lumigator/python/mzai/backend/backend/settings.py
@@ -19,15 +19,15 @@ class BackendSettings(BaseSettings):
 
     # AWS
     S3_ENDPOINT_URL: str | None = None
-    S3_BUCKET: str = "lumigator-storage"
+    S3_BUCKET: str  # Default is specified in .env file
     S3_URL_EXPIRATION: int = 3600  # Time in seconds for pre-signed url expiration
     S3_DATASETS_PREFIX: str = "datasets"
     S3_JOB_RESULTS_PREFIX: str = "jobs/results"
     S3_JOB_RESULTS_FILENAME: str = "{job_name}/{job_id}/results.json"
 
     # Ray
-    RAY_HEAD_NODE_HOST: str = "localhost"
-    RAY_DASHBOARD_PORT: int = 8265
+    RAY_HEAD_NODE_HOST: str  # Default is specified in .env file
+    RAY_DASHBOARD_PORT: int  # Default is specified in .env file
     RAY_SERVE_INFERENCE_PORT: int = 8000
     # the following vars will be copied, if present, from Ray head to workers
     # Secrets should be added directly to ray by setting env vars on the ray head/worker nodes