I currently have my app up and running, the app.yaml and dispatch.yaml are in the root of the application and I deploy through Google Cloud CLI. 
This works well for the moment, though as I move to having a dev, staging and prod environment I can see that it's no longer viable. 
The main issue I see is that I have to edit the variables in the app.yaml file so they are appropriate for environment (for example I use env_variables to store mysql credentials...).
I can't find anything in the docs that points to the correct way to manage this, any ideas?
Also... When deploying from a GIT repo it seems that the app.yaml needs to be in the repo, is this correct? It doesn't seem right to me... There must be a better way!